Three important statistics were released so far this week. Unemployment figures, January-November budget realizations, and October retail sales report.
I can easily say that unemployment rate will remain in double digits for a very long time. Although it may fall to single digit occasionally, this won’t definitely be permanent thing. However, the correlation between certain parameters seems to disappear.
A similar thing happened during the high GDP growth period 2 years ago. Having achieved a faster GDP growth rate even than China’s, Turkey was facing increasing unemployment figures each month. But, the interesting thing was that GDP growth wasn’t good for reducing jobless rate, let alone generating employment. The job preferences and choices of people, the increasing role of high tech in industry and drastically high rate of informal employment may have created this interesting phenomenon.
As the majority of experts is still using 20thcentury paradigms when making their assessments and analyses, most people believe that economic insufficiency is the reason underlying the high unemployment rate.
Me, on the other hand, I believe that unemployment is some sort of social and cultural insufficiency. Business leaders fail to create business environments that can help increase employee efficiency, especially young employees. Meanwhile, young people are getting more and more interested in learning how to live self-sufficiently. Thousands of people every day quite their corporate jobs to engage in something more joyful or meaningful for them, like launching Pilates or art classes. There is a high demand for newly created jobs and businesses such as ceramics/pottery workshops, preschool teaching, sports and wellness centres, music, making a living on social media, being a YouTube content manager etc. Therefore, we should take social and cultural aspects into account as well when analysing the concept of unemployment.
“Fed up with inconsistent statistical data…”
Recent budget performance turned out to be exactly as expected. Obviously, budget revenues could not rise as fast as budget expenditures in an economy that grows around by 0%. But, it appears like primary surplus has moderately increased compared to the previous year.
Don’t worry, there’s some good news as well: Turkey’s budget which was projected to run 120 billion TRY deficit this year has in fact run a total deficit of 93 billion TRY in January-November period shows that we may see better figures than expected at the end of the year. The only factor that helps improve the revenue performance is the “one-time” income, created due to decline in tax revenue. Although we are criticised by the IMF for such strange inventions, somehow we can manage to come up with a new invention idea year. That is the reason why Primary Deficit can be kept under control or Turkish economy can run Primary Surplus even though only a little.
Now, let’s take a quick look at retail sales. You know what? Let’s not! Because they seem utterly unpromising… They looked like they’ve been improving after a sharp downturn in July; but apparently, they once again hit rock bottom in October. In contrast with this harsh decline, there’s been an interesting rise in consumer confidence index in the same month, which means consumers feel more confident yet they still do not buy anything. I really am tired of trying to understand what is going on in Turkish economy, especially considering we’re living in an economic environment where even the data on one-to-one relationships seem to be inconsistent.