Economic crisis deepens: Increase in number of closed companies

The Union of Chambers and Commodity Exchanges of Turkey (TOBB) statistics on newly established and closed companies show that approximately 18 thousand businesses shut down in 5 months. As businesses struggle to maintain their existence in an environment of high interest rates and high inflation, financing difficulties have dampened the courage of entrepreneurs. In the first 5 months of the year, high costs forced businesses to close, and the decrease in the number of newly established firms approached 18 percent. So much so that in 5 months, compared to the same period last year, while a significant decline was observed in newly established firms, the number of closed firms remained at a similar level.

COURAGE BROKEN

According to the report by Sözcü, 53 thousand 383 businesses were established in the first 5 months of 2024. The number of businesses established in the same period of 2023 was 64 thousand 852. High interest rates, tight monetary policy, and difficulty in accessing financing broke the courage of entrepreneurs, and thus the decrease in the number of companies established in 1 year was 17.7 percent proportionally.

Despite this significant decrease in the number of newly established companies, the number of closed companies did not slow down. While the number of closed companies in the first 5 months of last year was 18 thousand 635, it was 17 thousand 716 this year with a limited decrease. While the decrease in the number of established businesses was 11 thousand 469 in the same period, the decrease in the number of closed businesses was 919. The decrease in the number of closed companies remained at 4.9 percent proportionally. There was also a significant decline in foreign investments in Turkey. While 5 thousand 723 businesses with foreign capital partners were established in the first 5-month period of 2023, this number remained at 3 thousand 333 in the same period this year.

News Source: 12punto