World Economy

Turkey’s Jobless Rate at 10-Month High

Turkey’s Jobless Rate at 10-Month HighTurkey’s Jobless Rate at 10-Month High

Turkey’s unemployment rate rose to a 10-month high of 10.8% in December 2015 from 10.5% in the previous month, data from the Turkish Statistics Agency (TUIK) showed on March 15. The rate was 10.9% in December 2014, according to official data.

Analysts expect the unemployment rate to continue to rise, as many Syrian refugees are set to join the labor force and Turkey’s GDP growth is not fast enough to create sufficient jobs, Anadolu Agency reported.

Number of unemployed people aged 15 years and over was 3.2 million in December 2015, an increase of 59,000 compared to the same period of the previous year. In the same period, non-agricultural unemployment rate was 12.7%—a decrease of 0.2 percentage point.

“Our concerns had focused on the negative effect of the refugee crisis and the huge increase in the minimum wage ... We will see the real negative impacts of the minimum wage increase in 2016 data. This will limit the employment increase and also increase unrecorded employment,” said ALB Securities analyst Enver Erkan.

Erkan said the country’s youth unemployment shows some improvement “but we think that this was caused by the decline of youth participation in the labor force.

“We expect 3.3% GDP growth for the fourth quarter of 2015, which is not enough to pull unemployment down. The unemployment rate is on an upward trend and this will continue in 2016,” he added.

Turkey’s youth unemployment rate decreased by one percentage point to 19.2% in the last month of 2015 compared to the same month of the previous year.

 Urgent Reform Needed

The employment rate rose slightly throughout the year to 45.4% in the last month of 2015 compared to the same month of the previous year, according to official data. Turkey’s labor force participation rate rose by 0.7 percentage points in December year-on-year, to 50.9%.

“Despite creating more than 800,000 jobs in 2015, unemployment rate remains high due to the rising working age population and the labor participation rate,” Deputy Prime Minister Mehmet Simsek tweeted after the TUIK data was announced.

SimSek added that “job reforms” cannot be delayed now.