April data will reflect the impact of COVID-19

Last week, the Purchasing Managers’ Index (PMI) increased parallel to expectations in May compared to the previous year. However, the slowdown in exports and imports continued, according to May preliminary foreign trade data.

The most important data to be announced this week is March and April. That’s where we may see the negative impact of the coronavirus outbreak.

Turkish Statistical Institute (TurkStat) will publish the labor force data for the March period (February-March-April) on Wednesday. According to previous data, the unemployment rate and youth unemployment rate in Turkey stood at 13.6 percent and 24.4 percent, respectively. Normally, the March unemployment rate falls below the February data. In March 2014, unemployment decreased by 0.5 points compared to February, by 0.6 points in 2015, by 0.8 points in 2016, by 0.9 points in 2017, 0.5 points in 2018, and 0.6 points in 2019. The rise in employment due to seasonal effects is the main reason behind this steady decrease. Because the coronavirus outbreak began to take its toll across the economy as of March, we may not witness a quick recovery. We will see this impact more clearly in the nonagricultural sectors and services sector.

To be announced on Friday, April industrial production index data may experience a contraction. The PMI index, a leading indicator of industrial production, dropped to 33.4 in April, down from 48.1 in March. This means we may see a 20 percent fall in the industrial production index this week. The course of the index is the most important indicator to define the growth rate of the economy in the second quarter. On Friday, TurkStat will also announce the April retail sales data. We will see a decrease, similar to industrial production. Expenditures made with debit and credit cards decreased in March, with a significant reduction in supermarket, food, and nonelectrical expenditures, according to Central Bank’s weekly money and banking statistics.