Turkish unemployment dips to 13.2 percent in May

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Turkey’s unemployment rate dropped 0.6 percentage points to 13.2 percent in May, while a seasonally adjusted measure of labor underutilization slipped from a month earlier, according to a Reuters report, which cited official data released on Thursday.

Turkey imposed a full lockdown in the first half of May as COVID-19 cases surged to record-high levels but the measures did not affect key sectors. The unemployment rate stood at 13.8 percent in April.

The labor underutilization measure had risen in recent months to around a peak touched in May of last year during the height of the initial COVID-19 lockdown. Data showed it slipped to 27.2 percent from 27.4 percent a month ago. Since early 2020, unemployment has been held down by a ban on layoffs that was lifted this month.

Economists say the lifting of the layoff ban, along with the end of other pandemic-related government support, will likely lead to a sharp rise in the number of unemployed as businesses, hard hit by virus-curbing measures, struggle to keep employees.

The labor force participation rate dropped 0.8 percentage points in May to 50.5 percent from a month earlier. From January the data was presented in a new format in line with international standards.

Separately, data showed housing sales in Turkey had dropped 29.1 percent in June, with mortgaged sales plummeting 75.1 percent year-on-year. Sales to foreigners surged 185.3 percent in the same period.

The sales last year were mainly driven by cheap credit, as the central bank lowered its policy rate to fend off the impact of the pandemic and state banks were urged to lend to spur economic growth.

The central bank has since dramatically raised it policy rate to 19 percent to lower inflation, which topped 17.5 percent last month, adding that tightening has caused loans to follow a moderate trend.

The bank will announce its latest rate decision on Thursday.

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