The supply shocks that emerged with the deterioration of the supply chain and the narrowing of liquidity facilities in the COVID-19 pandemic brought demand shocks by narrowing production and employment. This has taken the epidemic beyond a health crisis. In order to solve the crisis caused by supply and demand shocks, the need to implement expansionary monetary and fiscal policies together has arisen. The most important tool that can be used in fiscal policy is public transfer expenditures. Transfer expenditure is a type of expenditure against which there is no corresponding transfer of goods, services or production factors. Although these expenditures do not directly increase the goods, services or production factors, they can contribute to the accumulation or improvement of outputs/factors in the economy. Social transfer expenditures play a critical role in protecting purchasing power, meeting minimum living standards, expanding the scope of social security; economic transfer expenditures ensure the continuity of production and employment. Unemployment payments, direct income support, social assistance and grants have provided widely in developed countries. Developing countries, on the other hand, have the risk of inadequate demand-side policies due to the financial risks, the narrow fiscal space and the low expenditure multiplier. Turkey, which has determined a demand-oriented economic growth strategy, has faced problems such as high exchange rates, budget deficits, and increase in debt stock for the last few years. The uncertainty and insecurity created by COVID-19 have made this growth strategy of Turkey hard. Shortly after the first COVID-19 case was announced in the country, administrative measures were taken and public life was limited. These measures had negative economic consequences. In the first months of the pandemic, a contraction process was observed in all sectors of the economy. The Economic Stability Shield Package was put into effect for the rapid recovery of the economy. Within the scope of the package, applications such as tax reductions, tax deferrals, deferral of loan and interest payments, loan support packages, increasing pensions, minimum wage support and short-time working allowance can be listed. In the process, sectors such as construction, manufacturing and industry entered into a rapid recovery process. However, the expected improvement in sectors such as tourism, transportation, accommodation, food, culture, arts, entertainment and sports could not be realized due to the severity of the pandemic. While the new waves of the pandemic continued, public transfer expenditures continued to be presented. Tax, loan and interest payments have been postponed and the duration of the short-time working allowance has been extended. The supports provided in Turkey, it is seen that monetary policy is heavily utilized. Credit support packages such as individual basic needs, tradesmen, housing, vehicle and vacation were provided and the demand side was tried to be kept alive. In the field of social transfers—direct income supports, cash aids and grants—lagged significantly behind credit supports. Considering the projections for Turkey, additional social transfer expenditures should be made ready to be presented in order to protect the purchasing power of households. The sustainability of economic transfer expenditures is critical in maintaining the level of economic growth, employment and output in the long run.
