Turkish unemployment surges to an almost 10-year high

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Unemployment last stood at 14.7 percent in the February-April period of 2009. — Reuters file photo

Istanbul — Turkey’s unemployment rate surged to 14.7 percent in the December-February period, its highest level in almost 10 years, data from the Turkish Statistics Institute showed on Monday.

Non-agricultural unemployment stood at 16.8 percent in the same period, the data showed.

In the November-January period, unemployment stood at 13.5 percent while non-agricultural unemployment was at 15.6 percent. Unemployment last stood at 14.7 percent in the February-April period of 2009.

Turkey's economy is expected to contract in 2019 after a decade of strong growth, and economists are predicting a longer recession ahead after a recent bout of volatility in the lira, a Reuters poll showed on Friday.

The Turkish economy contracted 3 percent in the fourth quarter of last year after a currency crisis devalued the lira by nearly 30 percent against the dollar. It drove inflation to a 15-year high, severely limited companies' ability to service foreign debt and multiplied bad loans in the banking sector.

The economy will contract 0.3 percent this year, the median of a Reuters poll of 43 economists showed — well below the government's sharply lowered forecasts of 2.3 percent growth. There was a wide range of estimates, from growth of 2.3 percent and a contraction of 5.0 percent.

Turkey's economy last contracted in 2009, by 4.7 percent. From 2010 to 2017 its compound growth rate was 6.6 percent thanks to a construction boom driven by cheap capital following the global financial crisis.

The economy is expected to contract 3.4 percent and 1.2 percent in the first two quarters of 2019, respectively, before returning to growth of about 2.1 percent in the third, according to the poll's median.

The first quarter GDP reading is expected to be published on May 31.

The poll also showed that growth is expected to stand at 2.7 percent in 2020.

The International Monetary Fund this week forecast a 2.5 percent contraction in Turkey this year, and 2.5 percent growth in 2020.

Forecast in Friday's poll were generally revised down from a similar poll conducted three months ago, displaying a further deterioration in sentiment towards Turkey.

"We expect the economy to return to positive growth zone in the second half of the year," Muammer Komurcuoglu, economist at Is Investment, said of his "soft landing" scenario.

"Yet, this recovery is fragile and depends on political and geopolitical developments. — Reuters


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