Fresh data fosters perception of vulnerability
Data released by the Turkish Statistical Institute (TurkStat) last week has started to make us believe that a perception of uncertainty regarding our economy is continuing to build up. The unemployment rate realized as 10.7% in July. Despite employment mobilization and the strong incentives towards achieving that, this shows a half-point increase compared with the previous month that contradicts the usual seasonal figures. The Producer Price Index of Agricultural Products rose by 1.88% in September and increased annually to 11.48%; even reducing tariffs and opening doors for imports to stop such an increase at the cost of medium-term consequences couldn’t prevent this.
If such measures had not been taken for those issues, what levels would we have seen? Would any approach have prevented the figures and the macroeconomic outlook from worsening? These types of questions are not likely to be answered in the affirmative. If there had been no employment incentives and no rise in the imports of agricultural products, the outlook could have been much worse. Above all, this interfering approach, which isn’t sustainable, makes problems worse at the cost of saving the day. Trying to show unemployment and inflation figures as lower than they really are can’t prevent a strengthening perception of vulnerability.
One should seek to evaluate those figures together. For instance, what’s the share of the agriculture sector’s decline in creating seasonal jobs in the rise of the unemployment rate? Although we don’t have a figure in hand to answer this question, we still think it’s relevant. Both this negation we try to express and the situation around immigrants, who are not included in workforce statistics, has led us to this result.
The data released indicates that year-end unemployment might push 12% and the rise in agricultural product producer prices won’t revert to single digits. The goals of the Medium-Term Plan naturally make no sense as they ignore these issues and therefore it’s getting difficult for private businesses to be directed by that plan.This being the case, it’s not possible to prevent the increasing perception of uncertainty and vulnerability.