Kerem Alkin vs. Emre Alkin debate is to air on Ekoturk TV tonight at 8.00 PM. As two people from the same family but with different opinions, we’ll tackle the economic parameters and the Fed decision from our own unique perspective.
But first things first… Here’s what I think about the latest employment news… There’s been a certain rise in employment throughout February to March, which is an important improvement indeed. However, it’s quite normal that the employment rates seem to have declined compared to the same month last year, because Turkish economy had hit record highs in GDP growth in Q2 last year. As we have faced negative growth in the same quarter this year, we should find it normal that employment seems to be worse than the previous year. Nevertheless, it’s still a good sign that employment seems to have gathered strength again compared to February 2019.
Our biggest wish is that this improvement will continue over the upcoming months. While 27 million 157 thousand people were employed in January, the total number of people who were hired by employers has risen up to 27 million 355 thousand. In March, on the other hand, total employment was recorded 27 million 795 thousand. As is also understood from this data, figure seem to have declined compared to the same quarter last year but employment rate keeps going up every month.
We all are aware that unemployment in summer tends to fall due to seasonality; However, I do not exactly agree with this “purification” of the seasonal employment; because when you do this, you might as well tell the person who’s been hired, “You haven’t actually got a job”. Even if it’s due to seasonality, it’s important that people who are willing to work can find jobs. If sectors found an opportunity to boost their number of employees, I don’t think that it would be right to call it “seasonal”.
Obviously, everyone wishes to sign an at least one-year fixed term employment contract. According to the findings, however, flexible work schedule strengthens employers’ hand in terms of boosting employment. So, I think Turkish employment will improve as long as we continue to take brave steps in “flexible employment”.
Although these figures are retrieved from the previous months’ data, they give us an idea about the future risks and expectations. 14.1% jobless rate is too high indeed. Considering that “high jobless rate and lack of employment” are two main affect investment decisions, the importance of Fed’s upcoming decision on Wednesday proves again and again to be of utmost importance.
Fed’s slower monetary tightening and balance sheet reduction combined with a drastic change in its interest rate policy can change the wind’s direction at a global scale. However, certain parameters, particularly unemployment, public finance and financial infrastructure, must improve in order for low-cost cash can money to Turkish markets. Negative comments on CBRT and escalating tensions between Turkey and the United States were included in especially in Moody’s report. So, each and every one of our problems needs an urgent solution.
Overcoming these problems, however, will require a lot of patience and a calmer environment. I think another snap election is quite likely to take place after Istanbul elections. Therefore, it might be better for all of us to focus on solving problems right now instead of waiting for things to calm down before taking a solution-focused action.