Turkey’s unemployment is reported with a three-month lag and is already spiking, led by the lifting of a ban this month on employers firing workers, said Alaattin Aktaş, a columnist for the Dünya newspaper.
The jobless rate among young people and university graduates is reaching dramatically high levels and the stress experienced by the country’s youth is “unbelievable”, Aktaş said on Monday.
Official unemployment in Turkey of 13.2 percent does not reflect true levels – a more accurate measure would be the so-called idle labour force rate reported by the statistics office, which stood at 27 percent in May, Aktaş said.
“The real red apocalypse broke out in July, and we have not seen it reflected in the statistics yet,” he said.
Inflation is also spiking. Differences between consumer price inflation of 17.5 percent and producer price inflation of almost 43 percent must narrow somehow, Aktaş said. An acceleration in CPI, which should be expected, means annual inflation this year will probably come out at around 17 percent, he said.
The lira has stabilised after losses of some 16 percent against the dollar since January. That stability can be put down to an abundant supply of foreign exchange, mainly thanks to tourism, Aktaş said. “We’ll go through this for a few more months, then there’s going to be a return to the old days because there is neither direct investment inflow, nor portfolio investment that will increase the foreign exchange supply,” he said.
Hopes that Turks would cash in their foreign currency holdings for lira have proven unfounded, Aktaş said. Any move by the central bank to lower interest rates in August will mean “full dollarisation” because returns from lira deposits, which do not provide real earnings, will decline further, he said.
It is no wonder that the lira’s value is being attacked when the government talks about reducing interest rates every couple of days, Aktaş said.