Ana sayfa English Edition 2019: Most difficult year for business

2019: Most difficult year for business

2019 will likely be the toughest year yet in store for Turkey, which has over the recent period averted many potential disasters because of the global conditions, geopolitical developments, elections, a coup attempt and strained ties with the USThe reason why all of these challenges are expected to take their toll this year is that the aftershock from the fluctuations in financial markets that began in August last year are being felt in the real sector now. The country’s economy management is well aware of the situation and is taking steps to ease the real sector both in terms of measures directly aimed at specific sectors and in terms of measures that will be helpful on a larger scale. The economy administration has taken steps to help the real estate sector and the automotive sector separately, and recently announced a TL 20 million loan package for Small and Medium Scale Enterprises (SMEs) offering credit at low interest rates with no payback for the first six months. 14 banks have thrown their weight behind the scheme. As MarineDeal News was going to print, news reports were stating that the economy management was in preparation for a new package for 2.5 million small business owners to support them in various fields from rent support and tax relief to improving their branding skills and establishing cooperatives.

‘Cash squeeze wreaking havoc on balance sheets’
Certainly, these steps have been designed to dress the wounds of the markets, particularly those inflicted by the current cash squeeze in the market. But how successful will these measures be in actually healing the wounds? An answer to this question lies in the latest issue of Koç Holding’s group newsletter “News From Us,” where Koç CEO Ömer Koç was quoted as stating that a “tough year awaits the business world”. In his statement, made at the 32. Senior Executives Meeting of the Koç Group, Koç said the cash squeeze companies are experiencing after the crisis is wreaking havoc on their balance sheets.

Stones will move
Many other economists have the same prediction that this year will certainly be tough and possibly even the most difficult year in history for companies. The reasons they cite for this assertion are as follows:The real sector will be restructured; the companies will consolidate, enhance their capital, pay off debts and those who fail to pay back debt will be be sold into mergers and acquisitions. There will be those forced to end their commercial existence.

Experts say that there really are no other solutions to the issues companies are experiencing right now and highlight that companies can only dig themselves out of their current difficult position by shrinking, strengthening their financial health and paying their debts. This is why this year debt restructuring and access to financing will be the main themes for companies. Experts note that it doesn’t seem possible for the Turkish economy to continue functioning without a restructuring, adding that spending without earning and consuming more than one produces has reached an unsustainable point. Pointing to changes in international and global circumstances, experts say that a restructuring will bring significant gains, adding that if that doesn’t happen, the growing hunchback of debts will turn companies into the heaviest burden and biggest problem of the economy.