Turkey to unveil new package on unemployment

Turkey's government will announce fresh stimulus measures on Thursday to battle record unemployment.

Turkey to unveil new package on unemployment

Turkey's government will announce fresh stimulus measures on Thursday to battle record unemployment in the wake of the financial crisis and help alleviate chronic poverty in the country's southeast.

Turkish newspapers have said stimulus measures include cutting corporate tax from its current 20 percent in poorer areas and hiring hundreds of thousands of new public sector workers.

Prime Minister Tayyip Erdogan said every firm hire one more worker to help the government battle record unemployment of 16.1 percent.

He believes the economy will return to positive growth as early as this summer, but the IMF is more pessimistic and expects GDP to decline 5.1 percent this year.

One in three Turkish youths is without a job and nearly a million is added to the pool of job-seekers every year.

Turkish GDP shrank 6.2 percent in 2008's last quarter, and economists expect double-digit contraction in the first quarter. Quarterly GDP data will be announced on June 30.

A previous stimulus package that took affect in March for three months, saw many consumers reach for their savings rather than bank loans, which remain costly despite huge rate cuts.

Unlike many Western countries Ankara did not resort to huge stimulus packages as it hoped the Turkish private sector's dynamism and the relative absence of household debt would help it emerge from the crisis earlier than other countries.

Automotive, oil refining and TV producers are among possible sectors that will benefit from the tax cuts. The south-east may benefit the most as local industries such as cement, metals and textiles could be included.


Reuters

Güncelleme Tarihi: 04 Haziran 2009, 12:32
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