ISTANBUL (Reuters) - Turkish unemployment hit 11.2 percent in the first three months of the year, data showed on Friday, highlighting the pressures on the economy weeks before a parliamentary election.
Having built its reputation on years of economic expansion, the ruling AK Party is now faced with flagging growth, and has resorted to putting pressure on the central bank to cut interest rates.
But even as unemployment rose year-on-year — particularly among young people — Finance Minister Mehmet Simsek said strong tax revenues pointed to a recovery.
“The rise in unemployment is continuing,” Is Investment economist Muammer Komurcuoglu said in a note. “We think the big picture will not change and that, for as long as there is not a strong pick-up in growth, the high unemployment rate will continue.”
Unemployment averaged 11.2 percent during January-March, the Turkish Statistics Institute said, compared to 10.2 percent in the same period in 2014. That was slightly lower than the average for the three months to February 2015.
One out of five 15-24-year-olds was registered as unemployed, up from 17 percent a year earlier, the data showed.
While opinion polls point to a clear victory for the AKP on June 7, the Islamist-rooted party may fall short of the strong majority President Tayyip Erdogan needs to push through constitutional changes to create a full presidential system.
While recent economic data has not been positive — growth tumbled to 2.9 percent in 2014 from 4.2 percent the previous year — voters are likely to take a longer-term view of the AKP’s track record, said Tatha Ghose, an analyst at Commerzbank in London.
“Economically speaking, people still have a memory of the last two-three years, which has been better than under other management,” he said. “The party has a tremendous trend of job creation”.
The non-farm unemployment rate, also measured on a three-month average, eased to 13.2 percent in January-March from 13.4 percent in the previous period.
The lira firmed to 2.5890 against the dollar by 0856 GMT (04:56 EDT), its strongest level in more than a month, from 2.5976 late on Thursday.
The main BIST 100 share index rose 0.5 percent to 87,678.32 points. The benchmark 10-year government bond yield eased to 8.94 percent from 8.96 percent.
Editing by Kevin Liffey