Spotlight: Turkish ambitious job-creation package faces challenges of shrinking economy

ANKARA, March 6 (Xinhua) -- The Turkish government has promised additional 2.5 million employment opportunities for 2019, but experts warn that the economy of the country, on the contrary, is likely to shrink this year.

On Feb. 25, Turkish Treasury and Finance Minister Berat Albayrak announced that the government will create 2.5 million jobs in 2019 as part of the economic mobilization program.

At the launch of the program last week, Family, Labor and Social Services Minister Zehra Zumrut Selcuk said the Turkish government will "pay salaries, taxes and premiums of all new personnel employed by businesses for three months."

The Turkish government cooperated with 13 banks for the liquidity needs of the real sector to provide a 20-billion-Turkish lira (3.8 billion U.S. dollars) non-refundable loan finance package with a 1.54-percent monthly interest rate for small and medium-sized enterprises whose annual turnover is no fewer than 25 million liras.

Turkey's unemployment rate stood at 12.3 percent by November 2018, according to the Turkish Statistical Institute. The number of the unemployed people over age 15 is nearly 3.98 million, while the number of employed is 28.3 million.

The government aims to decrease the unemployment rate to 10.8 percent in 2021, according to its new economic program announced in September 2018.

It is the slowing growth that affects unemployment, according to Erdal Saglam, an economy columnist of daily Hurriyet.

There are major difficulties in employment in the light of the growth rate of 2018 and in the upcoming period, Saglam said.

"Even in years of high growth, such big employment figures could not be reached," he said, adding that expectations for Turkey's growth is narrowing according to surveys.

The government targeted a 3.8-percent target for economic growth in 2018. However, Saglam said none of the current forecasts show the expected growth rate.

Turkish year-on-year growth slowed down to 1.6 percent in the third quarter of 2018, while the figures of the fourth quarter and the annual growth will be announced in March.

In fact, a study published by Bahcesehir University Center for Economic and Social Research Center (BETAM) last week even expects the Turkish GDP to decline.

The study forecasts that the GDP growth will turn negative in the fourth quarter of 2018, with a 2.5-percent contraction compared to the previous quarter and a 3.8-percent annual contraction.

Turkey enjoyed strong growth for years, supported by break-neck construction projects and cheap loans. But last August, the country saw serious currency depreciation.

In a new medium-term economic program unveiled last September, the Turkish government sharply lowered its growth forecasts for 2018 and 2019 at 3.9 percent and 2.3 percent respectively. The program included a temporary lift of taxes on purchase of cars and white goods and an early transfer of 37 billion liras of the Central Bank profits to the Treasury.

In addition, the investment projects that haven't begun are already suspended as part of the program.

With high inflation rates, economic shrinkage, high unemployment, current deficit and budget deficit, it's highly possible that Turkey's economy might be drawn into economic depression, economist Mahfi Egilmez wrote on his blog.