Not good news in Turkey’s growth and unemployment figures
After the bad state of affairs in Turkey’s slowing growth rate, the increase in unemployment rates is also continuing. While the unemployment rate climbed to 10.2 percent in June, the seasonally adjusted unemployment rate increased to 10.9 percent.
Economic growth of 4.5 percent had been targeted this year, but current data show that even 3 percent would be considered a success. The growth data for the first half of the year were bad and figures for the third quarter also look rather hopeless. What’s more, expanding the two public “bayram” holidays over the last couple of months will have obviously negatively affected production figures and economic growth.
According to June data released by the Turkish Statistical Institute (TÜİK), the number of unemployed Turkish citizens aged 15 and over has increased to 3.13 million, while the increase in the unemployment rate was 0.6 percent. Expectations had been quite a bit lower than these figures, which hit six-year highs.
In the same period, the non-agricultural unemployment rate - which is a more important rate for industrial production - increased by 0.5 percentage points to 12.2 percent. The unemployment rate for young people (aged between 15 and 24), which is very significant for various social measures, increased by 1.7 points to reach 19.4 percent. The rate for the 15-64 age group increased by 0.7 points to reach 10.4 percent.
Meanwhile, even though it has decreased by 0.6 percentage points compared to last year, the fact that the rate of unregistered workers is 34 percent remains significant. Seasonally adjusted employment dropped by 222,000 compared to the previous period, falling to 27.13 million. Number of unemployed, seasonally adjusted, increased by 166,000 from the previous period to become 3.32 million. This rate is considered healthier data in terms of showing the true course in unemployment, and it shows that the state of affairs is even worse.
Consumption to be boosted
We know that the government has noticed and is concerned about the negative course of growth and unemployment rates. It has been searching for counter measures for some time.
Several measures have been announced to increase production – though it would be very difficult for these measures to be effective immediately this year. It is understood that the government believes that boosting domestic demand is an urgent remedy. Several flexibilities will be introduced to consumer credit and credit card regulations, primarily related to due dates, so that consumption is increased which in turn would be, to a certain extent, a remedy for the bad course in growth and unemployment rates.
Deputy Prime Minister Nurettin Canikli openly said earlier in the week after a cabinet meeting that with these measures the government aimed to stimulate domestic consumption for growth in the last quarter of the year.
But if you ask whether these new measures will be a successful remedy to increase growth, it looks like this will also be difficult. More precisely, unless the foreign capital inflow that has stopped due to domestic political and economic developments is re-opened, it will be very difficult to fuel growth.