Mahfi Eğilmez warns: Turkey is facing stagflation

Following the rise in unemployment data, economist Mahfi Eğilmez stated that the economic data points to "stagflation."

The rise in the June 2024 Labor Force Statistics released by TUIK has concerned economists. With unemployment at 9.2 percent, combined with the slowdown in industrial production announced last week, it points to stagflation, a situation where both stagnation or even contraction in the economy and a rise in unemployment occur simultaneously.

In industrial production, the contraction that began in April continued to accelerate in the June data released last week.

Economist Mahfi Eğilmez shared the charts of two data sets and made the following comment on his social media account:

“Industrial production is falling, unemployment is rising. The economy is heading toward stagflation.”

WHAT IS STAGFLATION?

Stagflation is a situation where stagnation—meaning economic downturn—and inflation occur simultaneously, characterized by rising unemployment rates alongside continuing price increases. Stagnation refers to a state where the growth rate of the gross national product (GNP) slows down or shrinks into negative territory, while inflation continues to rise and unemployment also increases.