ISTANBUL - Turkey was recovering from its first recession in a decade when the coronavirus hit. Now the economy is on the brink again, and President Recep Tayyip Erdogan is running out of options.
With a risk of mass unemployment, a collapse in tourism and an unstable currency, "the situation is extremely bad", said Atilla Yesilada, an economist at GlobalSource Partners think tank.
Erdogan unveiled a stimulus package in March before the virus hit Turkey hard, infecting more than 150,000 people, but critics say the $15 billion plan is insufficient.
With the daily death toll now falling, Erdogan recently announced a gradual lifting of restrictions in May and June to spur the world's 19th largest economy.
Turkey's annual gross domestic product (GDP) amounts to about $770 billion.
Economists nonetheless forecast a painful second recession, and some say Erdogan will have to seek help from the International Monetary Fund (IMF), an option he has always rejected.
If Erdogan has long been synonymous with prosperity for Turks, the economy has become his "Achilles heel", said Soner Cagaptay of the Washington Institute for Near East Policy.
One of the main reasons for Erdogan and the ruling AKP party's continued electoral success was the economic boom that followed the 2001 financial crisis.
Questions are now being raised over whether the worsening economy could affect Erdogan's ambitions for leadership in the region, where Turkey has a major role in conflicts in Syria and Libya.
The Turkish economy has been a concern since the 2018 currency crisis, with growth last year of just 0.9 percent, unemployment that reached 13.6 percent in February, and dogged double-digit inflation.
This dismal situation led to defeat in local elections last year, when Erdogan's ruling AKP party lost both Istanbul and Ankara.
"This is not the kind of economic panorama that keeps any leader in power, much less Mr Erdogan," Yesilada said.
Cagaptay noted that "there are no elections scheduled until 2023 but his popularity is slipping and... it would be hard to ignore calls for early elections if the economy tanks".
The government hoped for five percent growth in 2020, but the IMF predicts GDP will instead contract by five percent and unemployment will rise to 17.2 percent this year.
Growing market concern is reflected in the Turkish lira, which has lost around 15 percent of its value against the US dollar since the start of 2020.
The lira even set a record low against the greenback in early May, reaching 7.24 to the dollar before rallying back.
Its declining value is especially alarming because Turkey's private sector has contracted a substantial amount of debt in foreign currencies.
IMF, the 'last resort'
To spur business activity, Erdogan opted for targeted measures against COVID-19, such as lockdowns only on weekends or public holidays.
On Saturday, he hailed 4,000 workers who continued to build what is to be the world's longest suspension bridge despite the pandemic.
But tourism, which brought in $33.5 billion last year, has been hammered by a pause on flights for the past two months.
Confronted with such a gloomy outlook, economists believe Ankara will soon have to seek IMF help.
Turkey has asked for IMF assistance 19 times already, and for Erdogan, an impassionate advocate of sovereignty, such a move would be a humiliation.
"An IMF deal would be a last resort," consulting firm Capital Economics said in a note. "Erdogan is likely to exhaust all other options before seeking a bailout."
Turkey hopes to establish swap lines -- a security mechanism that helps avoid foreign currency shortages -- with foreign central banks, notably the United States Federal Reserve.
This is one reason for Ankara's recent "charm offensive" with Washington that included the supply of medical equipment, Cagaptay said.
But Erdogan has a few other cards in his hand.
Lower oil prices should dampen inflation, according to the European Bank for Reconstruction and Development (EBRD), which expects the economy to rebound next year.
Ankara could also take advantage of European companies' desire to shorten supply chains to gain market share and attract investment.
"This creates opportunities for Turkey. It has low wages, a skilled workforce and has an exemplary record of quality goods on time," Yesilada said.
Since the pandemic demonstrated the strength of the health system, Turkey could also benefit from increased medical tourism, already a thriving sector, he added.
Despite recording the highest infection rate last month behind Europe and the US, the number of deaths has been relatively low at around 4,200 since March, official figures show.