Turkey\'s Economy the Economic Indicators

Turkey's Economy

The economic indicators of a country provides professionals with information regarding the relationships among the various factors that influence the collective and individual welfare of citizens. Hence, links among factors such as inflation, GDP, and unemployment can offer insight into how the dynamic of these factors work together to achieve certain effects. Such information can also help policymakers to create economic solutions for the purpose of providing better for the country and is citizens. Unemployment, for example, can be mitigated by creating policies around an understanding of the country's GDP, inflation rates, and how these interact with each other. In Turkey, for example, a relatively close positive correlation is found between GDP and inflation, whereas unemployment is inversely correlated with these.

An unemployed person can be defined as someone who is of age and sufficiently able bodied to perform work, but who has no source of formal income. In other words, minor children who are living with their parents cannot be considered to be unemployed. Unemployment in Turkey and elsewhere is especially prevalent among young people, who, just having left school and before entering higher education, have not built up sufficient experience and skills to enter the full range of the job market.

Unemployment in general can relate to several factors. These can be directly related to the five type of unemployment identified by Oskay, Seda, and Ibrahim, which include: Frictional Unemployment, Structural Unemployment, Demand Deficient Unemployment, Seasonal Unemployment and Hidden Unemployment.

Frictional unemployment is experienced by former employees who have left their existing work or have been dismissed. Unemployment occurs for as long as they look for work. Structural unemployment occurs when the industry changes due to influencing factors such as technology or migration. In Turkey, and example of this is lower employment levels in the agricultural sector and a rise in urbanization. Demand deficient unemployment is closely related to these industry changes. When there is insufficient employee demands within a certain sector at the same time as an employee surplus, unemployment rises. Seasonal unemployment is created by sectors such as the hospitality and fruit picking industries, where demands for employees fluctuate according to the seasons. Finally, hidden unemployment refers to those who are not classified as unemployed, but may have been discouraged from searching for work. Turkey's unemployment rate has seen a steady decline from 2003 to 2013, with a current rate of 8.8% from about 12% early in the decade. The exception is around 2009, when unemployment spiked to a level of 16% in 2009 and just below 15% in 2010.

Inflation can be defined as the rate at which prices for goods and services increase, with a concomitant decrease in general purchasing power for such goods and services. The inflation rate is calculated by means of the consumer price index over time. Comparing these values result in a percentage, indicating the variation of CPI over time. For Turkey, the inflation rate shows a rapid decline from 30% in 2003, while it has remained fairly stable between 5% and 10% over the rest of the decade.