Unemployment rate falls in Turkey but warnings persist

Reuters/Umit Bektas

• Lowest jobless figure since 2012
• Economic stagnation looms in Q2
• Industrial activity weakens

Turkish unemployment levels fell to their lowest rate in more than 11 years in April, helped by strong first-quarter growth. 

However, troubling longer-term prospects could mean job queues lengthen again. 

Turkey’s headline unemployment rate, covering those aged 15 and over, fell to 8.5 percent in April, the lowest since November 2012 and down from 10 percent for April 2023, according to data issued by state statistics agency Turkstat.

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The number of unemployed fell by 18,000 for the month, taking the jobless total to 3.4 million, with 32.6 million in employment for the month.

Another positive was the slight easing in unemployment in the 15 to 24 age range, which dipped 0.1 percent month-on-month to 14.5 percent, the lowest since such data was first recorded in 2005.

Although Turkey’s GDP expanded by 5.7 percent in the first quarter, Professor Seyfettin Gürsel, the head of the Centre for Economic and Social Research at Bahçeşehir University, warns that growing headwinds will reverse falling unemployment figures in the coming months. 

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“High inflation, efforts to limit public spending, no increase to the minimum wage – all instruments are being used to curb domestic demand,” he told AGBI.

“What this picture tells us is that from the second quarter of 2024, we will face economic stagnation, and due to this employment numbers cannot go up, meaning we are standing on the threshold of higher unemployment.”

One of the factors that Gürsel said could drive a rise in joblessness is weaker industrial activity, which is already making itself felt. 

Industrial production fell 5 percent in April compared with the previous month and 0.7 percent on the April figure for 2023, according to a Turkstat report also issued on June 10. 

Government efforts to rein in inflation, which hit 75 percent in May, including austerity measures such as banning an increase in public service hirings, raising interest rates to 50 percent and cutting public works spending, are also expected to slow economic growth and reduce employment opportunities, at least in the medium term.