Turkey's unemployment rate declined for the third consecutive month to 10.5% in April, the lowest level posted since June 2016, the country's statistics office, TUIK, reported on July 17.

The unemployment rate of 13% registered in January was the highest recorded since February 2010 when it stood at 13.5%. Despite the slight recovery seen over the next three months thanks to seasonal factors as well as government stimulation and employment campaigns before the April 16 referendum, the April 2017 figure was nevertheless far higher than the 9.3% recorded for April 2016.

Recent data suggests that Turkey's economic growth performance is still weak despite the recovery reported over Q4 last year and Q1 this year from the Q3 2016 contraction of 1.3%. Not enough jobs are being generated. 

Dwindling numbers of tourist arrivals as well as political and security concerns in the wake of the coup attempt in July last year and terrorist attacks have hampered the economy’s performance.

Prior to the April 16 referendum that narrowly voted to introduce an executive presidency, the government argued that the economic outlook would improve and that investor confidence would be restored as political uncertainties would diminish. It has promised to carry out much-needed but long-delayed structural reforms that should focus on the economy’s weak spots such as inflation, the current account deficit and unemployment.

The Turkish economy grew 5% y/y in Q1, picking up from the 3.5% rebound seen in the previous quarter after the 1.3% slump experienced in the third quarter of 2016. However, markets are sceptical when it comes to TUIK’s growth figures.

Unemployment has not fallen significantly despite the GDP expansion observed over the last two consecutive quarters. The government is anxious about unemployment. The ruling AKP wants to see higher growth and lower unemployment rates before the 2019 election.

The month-on-month change in the number of unemployed people also showed a recovery, falling from 3.64mn in March to 3.29mn in April. There were 2.82mn unemployed people in April 2016, according to the TUIK data.

The seasonally-adjusted unemployment rate declined for the fourth consecutive month to 11.3% in April, the lowest figure recorded since September.

The labour force participation rate was 52.7% in April, up from 52.2% in the previous month.

The rate for youth unemployment jumped from 21.4% in March to 22.1% in April. Youth unemployment stood at 21.2% in April 2016.

Turkey's unemployment rate rose to 10.9% in 2016 from 10.3% in 2015.

The IMF projects that the Turkish unemployment rate will pick up to 11.5% in 2017 while it expects GDP growth of 2.5%.

The latest consumer confidence survey by TUIK showed on June 22 that the sub-index measuring consumers’ expectations regarding the number of unemployed people deteriorated by a sharp 6.1% m/m in June, following a 3% m/m improvement a month ago. The decline in the sub-index shows that consumers expect unemployment conditions to deteriorate.