Fresh data fosters perception of vulnerabil­ity

Dünya Executive - - COMMENTARY - Ugur CIVELEK Columnist

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.

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