Levent Gürses
Unemployment in Turkey has tripled compared to the European Union (EU). The Turkish Statistical Institute (TurkStat) has published the results of its Household Labour Force Survey for the second quarter of the year. According to the survey, in the April, May, and June period, compared to the previous quarter:
The number of unemployed increased by 106,000 to 3,034,000.
The unemployment rate increased by 0.3 percentage points to 8.6%.
The unemployment rate was 7.0% for men and 11.6% for women.
The rate of underemployment, potential labour force, and unemployed individuals (broadly defined unemployment) increased by 3.5 percentage points to 32.0%.
The broadly defined unemployment rate calculated by DİSK-AR (Confederation of Progressive Trade Unions of Turkey – Research Centre) using TurkStat data was 13 million 15 thousand.
DİSK-AR announced that in the first quarter of the year, the narrowly defined unemployment rate in the EU averaged 5.7%, while the broadly defined unemployment rate was 10.9%, reaching three times the EU average.
Additionally, while the point difference between the narrowly and broadly defined unemployment rates in the EU averaged 5.2, it reached 23.4 points in Turkey.
According to TurkStat, the number of employed persons decreased by 41,000 to 32,435,000, and the employment rate declined by 0.2 percentage points to 48.9%. This rate was 66.1% for men and 32.1% for women.
Based on TurkStat data, DİSK-AR announced the Registered Full-Time Employment (RFTE) rate as 33.9%.
The official employment rate for women was 32.3%, while the RFTE rate was 19.7%. For men, the official rate was 66.4%, and the RFTE rate was 48.4%.
Youth unemployment is also alarming. According to TurkStat data, the unemployment rate among young people in the second quarter increased by 0.7 percentage points compared to the previous quarter, reaching 15.9%. The unemployment rate was estimated at 11.7% for men and 23.7% for women.
The broad definition of unemployment rose to 34.5% among young men and 53.4% among young women.
According to DİSK-AR, since the AKP came to power in the third quarter of 2002, the broad definition of youth unemployment has risen from 26% to 41.7%. During the AKP era, the broad definition of youth unemployment increased by 15.6 percentage points.
The week’s important developments are as follows:
Consumer confidence index rises slightly but remains below critical threshold
The consumer confidence index rose by 0.9% in August to 84.3, but remained below the critical threshold of 100. The consumer confidence index, calculated based on the results of the Consumer Trends Survey conducted by the Turkish Statistical Institute (TurkStat) and the Central Bank of the Republic of Turkey, rose by 0.9% in August to 84.3, up from 83.5 in July. Although there was a slight increase in the index, it remained well below the critical threshold of 100 for economic confidence.
Worse still, the household financial situation index rose by 2.6% from 68.2 to 70, while the index for expectations regarding the household financial situation over the next 12 months fell by 0.9% from 84.6 in July to 83.8 in August.
The general economic situation expectation index for the next 12 months, which was 79 last month, was calculated as 78.4 in August, a decrease of 0.7%.
Government and unions fail to reach an agreement on wage negotiations
The government and unions have failed to reach an agreement on wage increases for civil servants and retired civil servants for 2026 and 2027. Memur-Sen has decided to refer its wage increase proposal to the Arbitration Board. The final decision will be made by the Arbitration Board. Memur-Sen General President Ali Yalçın said, ‘The public employer delegation has turned a deaf ear to the voice of civil servants and a blind eye to the grievances of retirees. Our struggle and our objections will continue.’ Yalçın also stated that they do not trust the Arbitration Board. Labour and Social Security Minister Vedat Işıkhan, however, stated that an agreement had been reached in 11 service sectors.
The market’s year-end inflation forecast has risen to 29.69%
In the Central Bank’s August survey of market participants, the year-end CPI forecast rose from 29.66% to 29.69%. The year-end dollar/TL expectation also rose from 43.72 TL to 43.96 TL.
In the third Inflation Report of the year, released last week, the Central Bank began announcing interim targets, referring to its unattainable inflation forecast as an ‘interim target.’ The interim target for the end of 2025 was set at 24%, while the forecast range was adjusted to 25-29%.
Income tax: Bayraktar brothers, Garanti and Ziraat in institutions
In 2024, the person who paid the most income tax was Selçuk Bayraktar, Chairman of the Board of Directors of Baykar and son-in-law of President Recep Tayyip Erdoğan, thanks to his export revenues. While only 21 names appeared on the top 100 list, 79 people requested that their names remain confidential.
Selçuk Bayraktar ranked first with 2 billion 767 million 587 thousand lira in income tax, while his brother Haluk Bayraktar came in second with 2 billion 528 million 619 thousand lira in income tax. The Bayraktar brothers paid a total of 5 billion 296 million lira in income tax.
In fourth place on the list was Mustafa Rahmi Koç, Honorary Chairman of Koç Holding, with 757 million 755 thousand lira in tax liabilities, while Erman Ilıcak, Honorary Chairman of Rönesans Holding, ranked tenth with 372 million 720 thousand lira in tax liabilities.
In corporate tax, Garanti Bank ranked first with 25 billion 296 million 492 thousand lira in tax liability. Ziraat Bank came in second with 20 billion 838 million 196 thousand lira in tax, while Kuveyt Türk Participation Bank secured the third spot with 12 billion 71 million 499 thousand lira.
The real sector’s net foreign exchange deficit hit a seven-year high
The net foreign exchange deficit of companies outside the financial sector rose to $185.8 billion in June, hitting a seven-year high. During the two years that Mehmet Şimşek served as Minister of Treasury and Finance, the deficit increased by $114.2 billion.
According to a report by Nefes newspaper, data published by the Central Bank on ‘foreign currency assets and liabilities of companies outside the financial sector’ revealed that the real sector’s foreign currency position deficit grew as it shifted towards foreign currency loans. The real sector’s foreign currency assets increased by 1.4 billion dollars in June compared to the previous month, while liabilities rose by 9.7 billion dollars. As a result, the net foreign currency deficit rose by $8.4 billion to $185.8 billion, reaching its highest level in seven years.
Credit card debt has turned into a quagmire
In Turkey, one in two people is either struggling to pay off their credit card debt or is already caught in a debt spiral. According to the latest research by the Consumer Union Federation, as citizens’ wallets shrink in the face of high interest rates, relentless inflation and declining purchasing power, credit card debt has reached 2.36 trillion Turkish lira. Additionally, 4.14 million people are facing the threat of foreclosure.
According to a study reported by Nefes newspaper, 43.5% of users are unable to fully repay their credit card debt, while a significant portion have been making only minimum payments for an extended period, thereby increasing their debt burden. Notably, 20.7% of users have not made any payments on their credit card debt in the past three months. The proportion of those who have only made partial payments for over a year stands at 18.5%, while those who have made no payments at all has reached 2.2%.
The Federation emphasised that one in three users is facing serious payment issues, with 9.2% trapped in a chronic debt spiral.
Ziraat Bank wavers in support for farmers despite 64 billion TL profit
Ziraat Bank reported a net profit of 64 billion lira in the first half of the year. Ziraat Bank General Manager Alpaslan Çakar stated, ‘While our cash loans, which constitute the most significant portion of our assets, exceeded 3.5 trillion lira, the total financing we provided for the country’s growth, including non-cash loans, reached 4.9 trillion lira.’
Despite the 4.9 trillion lira in financing provided, it has come to light that Ziraat Bank, the primary source of credit for farmers, has stood by idly as producers are being dragged into a debt spiral. According to a report by Birgün newspaper, farmers’ debts to Ziraat Bank in the first half of 2025 increased by 50.8% compared to the same period last year, reaching 839 billion 940 million lira. During this period, the bank’s closely monitored farmer support loans grew by 76.7 per cent to 33 billion 569 million lira.
PTT’s valuable real estate assets are being sold
PTT, one of the public companies that collapsed during the AKP era and has a debt of 3 billion TL, has put its valuable real estate assets up for sale. A total of 11 properties in four different provinces—Istanbul, Ankara, Afyon, and Denizli—will be sold at a minimum bid price of 1 billion 781 million 295 thousand Turkish Lira. The total area of the land being sold through tender is 289,966 square metres, equivalent to more than 40 football fields.
The Haber-Sen trade union, which issued a press statement regarding PTT’s decision to put its billion-dollar properties up for sale, responded with the statement: ‘The sale of these properties is not about debt repayment; it is about handing over public assets to allies.’
The number of employees decreased in 41 out of 88 sectors
According to the May 2025 issue of the The Economic Policy Research Foundation of Turkiye (TEPAV) Employment Monitoring Bulletin, the total number of insured employees, including those receiving Social Security Support Contributions (SGDP), increased by 0.9% year-on-year to 25,588,839.
The number of employees receiving SGDP payments also increased by 6.4% to 2,159,253, accounting for 8.4% of total employment.
In May, the number of insured salaried employees decreased in 41 out of 88 sub-sectors. The highest employment loss was observed in building and landscape activities with 94,324 people, while the contraction rate in the sector was recorded as 14.4%. There was a loss of 70,938 jobs in clothing manufacturing and 31,445 jobs in textile manufacturing.
Hatay, where there is a lot of construction, ranked first in terms of employment growth. The largest decline in the number of employees was seen in the industrial city of Bursa.
Short-term external debt stands at $168 billion
Short-term external debt stock decreased by 0.3% in the second quarter compared to the previous quarter, reaching 168.2 billion dollars. Short-term external debt stock, which shows debts with a maturity of 1 year or less regardless of their maturity, was recorded as 220.3 billion dollars.
Annual increase in agricultural inputs was 34
TurkStat announced two price indices. The agricultural input price index (Tarım-GFE) increased by 2.52% compared to the previous month, by 17.88% compared to December of the previous year, by 33.88% compared to the same month of the previous year, and by 32.27% compared to the twelve-month average.
The Foreign Producer Price Index (YD-ÜFE) increased by 3.03% compared to the previous month, 23.40% compared to December of the previous year, 30.06% compared to the same month of the previous year, and 25.46% compared to the twelve-month average.
Rise in service and construction sector indices
According to production indices announced by TurkStat, the Service Production Index rose by 3.7% in June compared to the same month last year. Accommodation and food rose by 4.1%, information and communication by 8.7%, real estate by 18.1%, and administrative and support services by 5.2%. The building construction sector index rose by 26.9% in June compared to the same month last year. The non-building construction sector index rose by 16.7% and the private construction activities sector index rose by 23.6%.
UBS’s gold price forecast for the end of 2026 is $3,600
Swiss-based bank UBS raised its gold price target for the end of 2026 to $3,600 per ounce due to ongoing US macroeconomic risks and strong investment demand. The bank also expects strong buying demand, particularly from ETFs and central banks, as well as anti-dollarisation trends to push gold prices even higher.
UBS raised its June 2026 forecast by $200 to $3,700, citing sticky inflation in the U.S., below-trend growth, and potential policy easing by the U.S. Federal Reserve, which are expected to support gold prices alongside a weaker dollar.
Inflation jumps in the United Kingdom, remains unchanged in the Eurozone
The annual consumer inflation rate in the United Kingdom jumped to 3.8% in July. This rate, which exceeded market expectations, is the highest since January 2024… Inflation was 3.6% in June.
In the Eurozone, inflation remained steady at 2% in July, in line with market expectations. In the European Union, inflation rose from 2.3% in June to 2.4% in July, with the highest rate recorded at 2.7% in Spain. In Germany, it was 1.8%, in France 0.9%, and in Italy 1.7%.
US tariffs will put pressure on the Indian economy
Although the Indian economy is largely dependent on the domestic market, US tariffs of up to 50% pose a serious risk to growth. According to Reuters, the tariffs could reduce the country’s growth by 1 percentage point over time, with the employment-intensive textile sector being the most affected.
Due to the impact of U.S. tariffs, Indian companies are facing the largest profit decline expectations in Asia. Profit forecasts for large and medium-sized companies for the next 12 months have been reduced by 1.2% over the past two weeks. This marks the sharpest downward revision in the Asia region.
Here are some brief news items from around the world:
The number of people filing for unemployment benefits in the US rose by 11,000 to 235,000 in the week ending 16 August, the highest level in eight weeks. The number of continuing claims reached 1,972,000, the highest level since November 2021.
The US Manufacturing Purchasing Managers’ Index (PMI) rose to 53.3 in August, its highest level in 39 months and above market expectations. Although the services sector PMI fell to 55.4, it remained above market forecasts and continued to expand.
The number of new homes started in the US rose by 5.2% in July to 1.428 million, exceeding expectations. During the same period, building permits fell by 2.8% to 1.354 million.
The Chinese economy signalled a slowdown with industrial production, retail sales and investment data. Industrial production rose 5.7%, retail sales rose 3.7%, while fixed capital investment rose 1.6% in the first seven months. The decline in the real estate sector weighed on investment, while the unemployment rate rose to 5.2%.
Japan-based SoftBank has signed an agreement to invest $2 billion in US semiconductor manufacturer Intel. SoftBank will pay $23 per share for Intel’s common stock.
Socioeconomic map released; regional income inequality remains a pressing issue
As Turkey debates the topic of a ‘trillion-dollar economy,’ the TurkStat has published a statistic on the subject that should serve as a lesson.
It measured the socio-economic status of over 26 million households, calculated based on the income levels, average education duration, and occupational information of household members, using data from 2022, 2023, and 2024, with 2023 as the reference year, and revealed the socio-economic rankings at the provincial and district levels.
Istanbul, Ankara, Izmir, and Kocaeli stand out
According to the study, the provinces with the highest percentage of households in the top and upper socio-economic level groups (top + upper income group total) were, as expected, Istanbul with 28.6%, Ankara with 11.5%, Izmir with 6.7%, Bursa with 3.9%, and Antalya with 3.3%.
The provinces with the highest socio-economic status (SES) scores were Ankara with 150 points, Istanbul with 148 points, and Kocaeli with 146 points. The provinces with the lowest SES scores were Sinop with 112 points, Yozgat with 113 points, and Şanlıurfa with 113 points.
“There are deep regional divisions”
Experts highlight the significant income disparities between research regions. Ozancan Özdemir, a researcher in Mathematics and Artificial Intelligence at the University of Groningen in the Netherlands, told BBC Turkish that the published map reveals ‘deep regional disparities,’ stating, “The western and southern parts of the country have a higher socio-economic level compared to the northern and eastern regions. The emergence of the three major cities is not surprising to me, but the question that needs to be asked is why there are so few other provinces with high levels outside these cities.”
Public opinion researcher and economist Can Selçuki emphasised that regional development inequalities have been a long-standing problem, saying, ‘To address this, incentive programmes and other spending programmes have been developed for years, and significant resources have been allocated. However, when you look at it, we don’t see a very significant difference.’
The least developed districts are Çamoluk, Derebucak, and Doğanşar
The study also ranked districts. The districts with the highest socio-economic level (SES) scores are as follows: Ankara Çankaya 178 points, Istanbul Kadıköy 176 points, Istanbul Beşiktaş 175 points, Ankara Etimesgut 168 points, Istanbul Bakırköy and İzmir Güzelbahçe 164 points, Istanbul Maltepe and Üsküdar 163 points, Istanbul Ataşehir with Ankara Yenimahalle and Gölbaşı 162 points.
The 50 districts with the lowest SES scores are as follows:
Giresun Çamoluk 81
Konya Derebucak 81
Sivas /Doğanşar 82
Kayseri Felahiye 83
Kastamonu/Pınarbaşı 84
Sinop Dikmen 84
Çankırı/Bayramören 85
Sinop Saraydüzü 86
Sivas /Koyulhisar 86
Yozgat Çayıralan 86
Erzincan/Kemah 87
Malatya/Pütürge 87
Ordu/ Mesudiye 87
KastamonuŞenpazar 89
Niğde Altunhisar 89
Sivas/ Hafik 89
Aksaray/Gülağaç 90
Aksaray/Sarıyahşi 90
Bilecik İnhisar 90
Çorum Kargı 90
Edirne Meriç 90
Kastamonu Cide 90
Kastamonu/Çatalzeytin 90
Çankırı Yapraklı 91
Afyon Kızılören 92
Sivas Gölova 92
Yozgat Çandır 92
Burdur Altınyayla 93
Isparta Sütçüler 93
Karabük Eflani 93
Yozgat Saraykent 93
Afyonkarahisar/Emirdağ 94
Aksaray Güzelyurt 94
Antalya Gündoğmuş 94
Balıkesir Balya 94
Bolu Dörtdivan 94
Giresun Alucra 94
KastamonuAzdavay 94
Kayseri Özvatan 94
Konya Hüyük 94
Konya Kulu 94
Sivas İmranlı 94
Bingöl Yayladere 95
Diyarbakır Çınar 95
Hatay Altınözü 95
Kastamonu/Doğanyurt 95
Kastamonu Araç 95
Kastamonu/Doğanyurt 95
Kırıkkale/Sulakyurt 95
Kırşehir Akçakent 95
The ratio of the lowest, lower and lower-middle income groups is 51.8%.
The study also revealed another important fact: while the middle class is shrinking in Turkey, the lower income group is growing. The study defines seven socio-economic groups: ‘top,’ ‘upper,’ ‘upper-lower,’ ‘upper-middle,’ ‘lower-middle,’ ‘lower,’ and ‘bottom.’
1.1% of households in Turkey are in the top tier, 11% are in the upper tier, 16.4% are in the upper-lower tier, 19.7% are in the upper-middle tier, 16.5% are in the lower-middle tier, 18.6% in the lower level, and 16.7% in the lowest level.
Accordingly, the total of the lowest, lower, and lower-middle income groups amounted to 51.8%.
‘There is no thick middle class’
Emphasising that these ratios show that ‘the inequality we see in income and wealth distribution calculations also exists at the household level,’ Can Selçuki says, ‘The pattern we are accustomed to seeing in Northern or Western Europe, with a thick middle class and thin upper and lower classes, is clearly different here. The upper class is narrower, while the middle and lower classes are relatively broader.’
Yes, we have exceeded one trillion dollars, but how?
Let us move on to the following topic: President Recep Tayyip Erdoğan stated that our national income exceeded one trillion dollars for the first time, reaching 1 trillion 371 billion dollars in the first quarter of 2025, and that they took over the national income at 230 billion dollars at the end of 2002.
President Erdoğan also noted that per capita income rose to 15,463 dollars in 2024 and 15,971 dollars in the first quarter of 2025.
This is correct and not new.
According to the World Bank, by the end of 2024, Turkey’s economy will be worth $1.32 trillion, with a per capita income of $15,461.
The International Monetary Fund (IMF) also predicts that we will reach 1.45 trillion dollars by the end of this year.
However, it is worth recalling the statement made by CHP Deputy Chairman Özgür Karabat regarding the AKP’s income inequality and deepening poverty.
Emphasising that Turkey’s share of the world economy has not changed in 20 years despite claims that the national income has reached 1.3 trillion dollars, Karabat said, ‘The money collected from workers, civil servants and pensioners is going to pay interest to the rich.’
Karabat drew attention to the following points:
The top 20% of the population with the highest income receives 48.1% of the national income. The richest 10% owns 32.9% of the national income.
The annual incomes of minimum wage earners and retirees are far below the per capita national income level. The annual income of a minimum wage earner is 265,000 TL, while that of a retiree is 188,000 TL. If the real value of the dollar were above 50 TL, per capita national income would drop to 11,000 dollars.
Refugees were not included in the calculations. National income should be divided among 95 million people, not 85 million.
Today, there are 2.5 million millionaires. In April 2024, this number was 1.6 million.
In the first seven months of the year, tax revenues increased by 50%, while interest payments increased by 87%. The money collected from workers, civil servants and pensioners went to pay interest to the rich.