The rise in TurkStat unemployment data for June 2024 worried economists. While unemployment was 9.2 percent, combined with the slowdown in industrial production announced last week, it pointed to stagflation in the economy, where both stagnation or even contraction and an increase in unemployment are experienced simultaneously.
The contraction in industrial production, which started in April, accelerated in the June data released last week.
Economist Mahfi Eğilmez shared the graphs of the two data and made the following comment on his social media account:
“Industrial production is falling, unemployment is rising. The economy is heading for stagflation.”
Stagflation is a situation in which stagnation, that is, stagnation and inflation occur at the same time, while the unemployment rate in the economy increases and prices continue to rise. Stagnation refers to a situation in which the rate of gross national product (GDP-growth) slows down or shrinks to a negative rate, leading to a sustained increase in inflation and a rise in unemployment.