The economics of Bayram
I rarely notice Bayrams (Eids): Not only does our family-run hotel cater mainly to Brits, every day is a Bayram for me, in case you are familiar with the Turkish expression “every day is a Bayram to the crazy,” which conveys more or less the same meaning as “every day I’m shuffling.’”
That doesn’t mean that Bayrams are not important for domestic tourism. They are, especially if they come right before or after the weekend: Taking a couple of days from work, many Turks then go for a weeklong vacation. With the first day of the Bayram on July 17 this year, all they are getting is a long weekend, and so the impact on tourism may turn out to be a bit less.
With the country on vacation for at least for a couple of, and as much as five, days, it is normal that the economy slows down a bit during Bayrams. Industrial production is particularly affected. Two-and-a-half extra off days, including the half workday on July 16, may not seem like much, but they amount to 10.9 percent of the 23 working days of this month.
Another negative economic consequence of Bayrams is what I call the “procrastination effect”: As Bayrams approach, debts are put off, meetings postponed and the delivery of goods delayed. “Let’s talk after the Bayram” is an expression I encounter many times twice a year, and one that I have come to truly despise, in my own business dealings as well. However, I have yet to see an academic paper quantifying this effect.
Not all is doom and gloom for the Turkish economy during Bayrams. On the contrary, in the absence of a proper holiday season from Thanksgiving all the way to Christmas and consumption-oriented national holidays like the 4th of July (Turks do not go on a shopping spree on the National Sovereignty Day, Oct. 29), the two Bayrams are Turkey’s main shopping periods.
Interestingly enough, while holiday shopping is a well-researched phenomenon in the United States, United Kingdom and other “heathen,” in RTE-speak, lands, there is not much research regarding the extent of Bayram shopping in Turkey. The Central Bank is an important exception. In several research pieces, they look at the change in currency in circulation during Bayrams.
They note that liquidity usually goes up around 20 percent during the festival of sweets, as the Bayram after Ramadan is known, and 30 percent before the Feast of Sacrifice – which is to be expected given the former is three days long and the latter four. Interestingly enough, this Bayram effect was much lower last year, with liquidity during both feasts rising only around 10 percent. It will be interesting to see if that was a one-off thing or not.
Despite all the “deals,” with people shopping more, it is no wonder that there is usually some demand pressure on prices, especially food products, during not only Bayrams but also Ramadan. However, because of the many factors affecting food prices, it is very difficult to figure out the exact impact on inflation.
Unless you are completely nuts like me, as evident from my last name that literally translates as “crazy dervish,” and therefore every day is a Bayram for you as well, I wish you Happy Eid! Drive safe and please go easy on the national drink (not the president’s) after a month of abstinence.