Economy
Türkiye’s unemployment rate sinks to 8.2% in Q1
Türkiye’s unemployment rate edged lower in the first quarter of the year, even as the number of employed people and overall labor force both declined, official data showed Monday.
The unemployment rate fell 0.1 percentage point from the previous quarter to 8.2%, the Turkish Statistical Institute (TurkStat) said. Unemployment stood at 6.8% for men and 11.1% for women.
The number of unemployed people declined by 52,000 to 2.89 million during the January-March period.
However, the number of employed people also fell by 301,000 from the previous quarter to 32.22 million, the data showed. As a result, the employment rate dropped 0.5 percentage points to 48.3%.
The employment rate was significantly higher among men at 65.7%, compared with 31.3% for women.
The labor force also contracted, falling by 353,000 to nearly 35.12 million. The labor force participation rate declined 0.7 percentage points to 52.6%.
Youth unemployment steady
Unemployment among young people aged 15-24 remained unchanged at 15.2% in the first quarter.
Within this group, the jobless rate stood at 12.6% for men and 20.4% for women.
According to TurkStat, employment fell by 44,000 in agriculture, 20,000 in industry, 48,000 in construction and 189,000 in services.
Despite the declines, the services sector continued to dominate employment, accounting for 59.3% of total jobs. Industry accounted for 20.2%, agriculture 13.8% and construction 6.7%.
The composite “idle labor force” rate, which includes time-related underemployment, potential labor force and the unemployed, rose 0.6 percentage points to 30.4%.
The data showed the combined rate of underemployment and unemployment stood at 19.8%, while the combined rate of potential labor force and unemployment was estimated at 20.4%.
Consumer confidence in Türkiye increased modestly in May, reaching its highest level in 14 months, according to a survey released Monday.
The consumer confidence index, jointly compiled by the Turkish Statistical Institute (TurkStat) and the Central Bank of the Republic of Türkiye (CBRT), rose 0.3% month-over-month to 85.8 in May.
The reading is up from 85.5 in April and marks the highest level since March 2025.
The index measuring households’ current financial situation fell 3.5% in May to 69.2, down from 71.8 in April.
In contrast, expectations for the next 12 months improved modestly. The household financial situation expectation index rose 0.5% to 87.9 from 87.5 in the previous month.
The greatest improvement among subcomponents was seen in broader economic expectations.
The general economic situation expectation index climbed 3.9% to 81.4, up from 78.3 in April.
Spending intentions for durable goods in the next 12 months remained broadly stable, inching up to 104.5 from 104.4.
The improvement in sentiment comes amid ongoing efforts by policymakers to stabilize inflation and macroeconomic expectations amid pricing pressures amid the fallout of the Iran war.
The conflict, which started in late February after the U.S. and Israel launched joint strikes on Iran, has effectively shut the key Strait of Hormuz, causing what is described as the biggest energy supply crisis ever.
The higher energy prices and transportation prices were among the main drivers behind an increase in Türkiye’s consumer inflation in April, when it reached 32.37%, compared to 30.9% in March.
Last week, CBRT raised its year-end inflation forecast to 26% from 16% and warned of risks linked to the Middle East conflict.
The central bank policymakers said there would be no compromise on their determination to bring down inflation and they will continue to use all available tools for disinflation.
The bank kept its key interest rate at 37% last month, holding steady for the second successive policy meeting due to war-related disruptions.
Despite the May improvement, the consumer confidence index remains below the 100 threshold, signaling that households remain cautious, particularly regarding income stability and purchasing power.
Commerzbank formally rejected UniCredit’s takeover offer on Monday, reinforcing its opposition to the Italian lender’s months-long attempt to acquire the German bank.
UniCredit has become Commerzbank’s largest shareholder and earlier this month made an unsolicited offer to buy its shares in a deal that values the bank at nearly 39 billion euros ($45.37 billion), below its market price.
Commerzbank’s supervisory and management boards “recommend that shareholders not accept UniCredit’s exchange offer,” the bank said in a summary of a 137-page analysis of the deal.
It said that the offer “does not reflect the fundamental value of Commerzbank” and that it was “vague and entails considerable risks”.
Commerzbank executives – along with Germany’s government and bank employees – have long criticized the tie-up attempt as hostile, recently calling UniCredit’s offer “vague and coercive” with “quasi-nil premium.” But until Monday, management had held out on giving a final opinion and recommendation to shareholders.
“UniCredit’s takeover offer does not offer an adequate premium to our shareholders. What is described as a combination is in fact a restructuring proposal that would massively impact our proven and profitable business model,” said Commerzbank CEO Bettina Orlopp.
The opposition is likely to further drag out the battle for control of one of Germany’s top banks that started in 2024 when UniCredit began amassing its stake in a competitor that has grown close to 30%.
It sets the stage for a tense event on Wednesday when Commerzbank convenes its annual shareholder meeting.
In a brief statement on Monday, UniCredit said it fundamentally disagreed with many of Commerzbank’s statements, calling them “unfounded or unsupported” and that it would respond with more detail “in due course.”
UniCredit’s CEO Andrea Orcel has argued that Commerzbank has not been living up to its potential and that Europe would benefit from bigger banks in a world of chaotic geopolitics.
Commerzbank’s “current trajectory will put at risk its survival in the medium term,” Orcel said last month.
Commerzbank said in its analysis that a takeover by UniCredit could result in up to 11,000 full-time job cuts. It also warned that investors who accepted the offer exposed themselves to UniCredit’s business risks in Russia and its large Italian government bond holdings.
Swiss watch giant Swatch blamed on Monday the insufficient organisation by shopping centers as a contributing factor to scuffles at around 20 stores worldwide over the weekend, as clients raced to buy a limited-edition timepiece.
Hundreds of people waited through the night or longer, hoping to get their hands on the “Royal Pop” timepieces, billed as a “disruptive collaboration” with the luxury watchmaker Audemars Piguet.
But things turned ugly in New York and several European cities as well as in Thailand on Saturday, with fights breaking out and some security gates vandalised at some of the 220 stores offering the watches.
In France, officers fired tear gas to control a crowd of around 300 would-be buyers outside a Swatch shop near Paris, and four people reported being punched in the crowded mass outside a store in Lille, northern France.
“There were problems… because the lines were extremely long and the organisation by some shopping centres was not sufficient to handle the rush,” Swatch said in a statement to Agence France-Presse (AFP).
It noted similar incidents during the 2022 launch of its MoonSwatch collaboration with Omega.
“As with the MoonSwatch, things ‘normalised’ a bit after launch day, especially after we again communicated that the Royal Pop collection would be available for several months,” it said.
Fights and police interventions were also reported at stores in Amsterdam, London and Milan, and Swatch said it had to close stores in several cities for “safety considerations.”
Türkiye, aware of “temporary” price increases amid regional tensions, is taking all necessary measures and will continue to do so, President Recep Tayyip Erdoğan said Monday.
“Our economic management team is taking and will continue to take all necessary measures to minimize the stress experienced by the market,” Erdoğan said.
The conflict, which started in late February after the U.S. and Israel launched joint strikes on Iran, has effectively shut the key Strait of Hormuz, a crucial global trade route, causing what is described as the biggest energy supply crisis ever.
The fallout poses a challenge for import-heavy economies like Türkiye, where higher energy prices and transportation prices were among the main drivers behind an increase in inflation in April.
The consumer price inflation reached 32.37%, compared to 30.9% in March, official data showed.
Erdoğan said the government is aware that “not everything is rosy.”
“We know the pressure that temporary price increases, stemming from regional and global developments, are putting on both our citizens and the real sector,” he told an event of the Union of Chambers and Commodity Exchanges of Türkiye (TOBB) in Ankara.
“We will continue to monitor this and provide the necessary guidance based on your suggestions, findings and criticisms,” he added.
Erdoğan pledged to continue the fight against exorbitant price increases, conveying that “disproportionate increases in the prices of some products cannot be explained by market conditions.”
“We are resolutely continuing our inspections targeting opportunists in the market,” he noted.
The president went on to highlight the strides he said the Turkish economy has achieved over the past 23 years.
While citing positive momentum in exports, led by defense exports, which have surpassed the level of $10 billion, he also said that the unemployment rate continues to be at single digits.
Erdoğan underscored TOBB’s role in the Turkish economy, while touching upon its contributions, starting from exports to technology initiatives.
“I would like to express my gratitude, through you, to all my brothers and sisters who have contributed to Türkiye’s growth and development, and who have played a part in bringing our country to its current levels,” he said.
“The Union of Chambers and Commodity Exchanges of Türkiye, as the umbrella organization of our private sector with 365 chambers of commerce, chambers of industry, commodity exchanges, and maritime chambers of commerce, truly fulfills a very important mission.”
Moreover, he went on to cite that TOBB, through the Credit Guarantee Fund, has helped to facilitate access to finance for its members, while mentioning that together with defense and electronics giant Aselsan, it has also produced the first quantum computer, which he said “will bring our country to a strategic position in global technology competition.”
The focus on “strategic stability” during a summit between U.S. and Chinese leaders last week is considered to have reduced geopolitical risks for Chinese markets, but little progress on trade and the Iran war concerns will keep investor enthusiasm in check.
Trump’s first visit to Beijing since 2017 ended on Friday with no major breakthroughs on trade or tangible help from Beijing to end the more than two-month-old U.S.-Israeli war on Iran that has roiled the global markets.
While investors had limited expectations from the summit, they had hoped the talks could provide a pathway for a resolution to the war, which has sent energy prices surging amid rocky negotiations between Washington and Tehran.
The Chinese yuan on Monday slipped to a near two-week low against the dollar, as investor focus shifted from the summit to a global bond selloff triggered by inflationary worries and fresh signs of Middle East tensions.
Chinese stocks were largely flat on Monday after sliding more than 1% on Friday, as a risk-off mood descended upon global markets.
William Bratton, BNP Paribas’ head of cash equity research for Asia-Pacific, said while the summit was unlikely to result in immediate wins for equity investors, the longer-term outcomes were positive in terms of reducing geopolitical risk.
“This should, in turn, alter investor risk perceptions and may encourage U.S. capital to revisit the relative attractiveness of Chinese investment opportunities,” he said.
“We have, after all, seen U.S. investors turn incrementally more positive on Chinese equities year-to-date and we expect this to continue as the U.S.-China bilateral stabilises or, perhaps more accurately, becomes more predictable.”
The subdued market reaction to the summit on Monday also came after data showed China’s growth lost momentum in April, with industrial output and retail sales both sharply missing expectations.
Capital Economics analysts said that the glass-half-full interpretation is that although there were no breakthroughs, the summit helped to cement the trade truce, reducing the near-term risk of a renewed escalation.
“The fact that Trump has invited Xi to visit the U.S. in September also increases the odds that the two sides will play nice over the coming months,” they said in a note.
‘Tightly managed rivals’
Investors had hoped the talks could help pave the way for a peace deal in the Middle East. But with China, which is the biggest buyer of Iranian oil, offering no clear indication that it would weigh in on the conflict, markets are wary of renewed turmoil.
The geopolitical differences between the two countries have been laid bare, analysts said, by the contrasting positions of Washington and Beijing on the Iran war and the Strait of Hormuz, through which about a fifth of the world’s oil and liquefied natural gas normally passes.
Trump said Xi had agreed Tehran must reopen the critical waterway, while Xi did not comment on his discussions with Trump about Iran. China’s Ministry of Foreign Affairs called it a conflict “which should never have happened, has no reason to continue.”
Charu Chanana, chief investment strategist at Saxo, said without clear follow-through on trade, Taiwan, or the Iran conflict, the meeting risks being seen as a non-event: useful for sentiment, but not enough to change the market backdrop.
“That is where the risk still sits,” Chanana said. “Investors may be underpricing the chance that the Iran conflict keeps oil prices elevated, inflation expectations sticky and bond yields higher for longer.”
Separately, Taiwan will remain a significant factor in U.S.-China relations, analysts said, after Xi told Trump that mishandling the island could lead to conflict between the two powers.
Sam Jochim, an economist at Swiss private bank EFG International, said whether Trump signs off on a $14 billion arms sale to Taiwan will be of importance.
“Such a move would have the potential to destabilise his relationship with Xi,” he said.
Trump himself sowed some uncertainty after saying on Friday he had not decided whether to proceed with a major weapons sale to Taiwan.
A trade truce struck between the U.S. and China after a series of tit-for-tat escalations is due to expire later this year, and the lack of clarity around tariffs during the summit has weighed on investor sentiment.
Even the deal touted as the biggest single deliverable from the talks disappointed investors since Boeing’s stock fell after Trump on Thursday said China would buy 200 of the company’s jets, a number that was far fewer than analysts had expected.
Despite the limited progress on the trade front, Ting Lu, chief China economist at Nomura, called the two-day summit an exercise in “economic and political risk containment,” noting it delivered short-term stabilization for both leaders.
“For the remainder of 2026, the G2 powers have decided that if they must be rivals, they will at least be predictable, transactional, and tightly managed rivals,” Lu said, referring to a term Trump used for the duo in October.
Government bonds from Tokyo to New York extended losses on Monday as rising energy prices fueled by the Iran war stoked inflation concerns and reinforced investor bets on further rate hikes by central banks worldwide.
Benchmark 10-year U.S. Treasury yields, which move inversely to prices, jumped as much as 3.6 basis points to their highest since February 2025, at 4.631%, in early Monday trading, after climbing more than 20 basis points last week.
The two-year yield, which is most sensitive to inflation and rates expectations, touched a 14-month top of 4.105%, while the 30-year U.S. Treasury yield rose to a one-year high of 5.159%.
All three were trading just below those highs by mid-morning in Europe, still enough to cast a shadow over stock markets that have surged on the AI enthusiasm of recent weeks.
The bond selloff came on the back of a climb in oil prices on Monday, with Brent crude futures at $111 a barrel, as efforts to end the Iran war appeared to have stalled following a drone strike at a nuclear power plant in the United Arab Emirates (UAE).
More than two months into the war, investors are beginning to fret about the economic fallout from the conflict, fearing high energy prices will spill over into broader price rises and require central banks to raise interest rates.
Markets are now pricing in a more than 50% chance the U.S. Federal Reserve (Fed) will raise rates by December, according to the CME FedWatch tool, to combat the rise in inflation. Before the war, investors had seen the Fed cutting rates this year.
Market ructions are top of mind for G-7 finance ministers who met in Paris on Monday.
“We are no longer in a period where public debt is not a subject,” French Finance Minister Roland Lescure told reporters as he arrived at the meeting.
Kenneth Broux, head of corporate research FX and rates at Societe Generale, said to stop what he called a “slow-motion crash” in the bond market would require a retreat in oil prices, recession fears growing enough to spark a safe-haven rush to bonds, or prices falling low enough to attract buyers.
Japan bond yields at record high
Adding to the selloff on Monday was news that Japan’s government will likely issue fresh debt as part of funding for a planned extra budget to cushion the economic blow from the war, worsening already strained government finances.
Yields on the 30-year Japanese government bond (JGB) jumped more than 10 basis points (bps) to their highest on record at 4.200%, while the 10-year yield touched its highest since October 1996 at 2.800%.
DBS senior rates strategist Eugene Leow said news of the extra budget would compound current bond market anxieties.
“Sentiment was already weak heading into last week’s close. Additional fiscal spending from Japan definitely worsened matters,” Leow said.
“This feels like a rolling re-pricing across curves in the region as investors grapple with inflation worries.”
Eurozone bonds were also under pressure, with Germany’s 10- year yield, the benchmark for the currency bloc, hitting a 15-year top of 3.193%, extending last week’s 14 bp gain.
Markets see an 80% chance the European Central Bank (ECB) will raise interest rates next month and are pricing three such moves by year-end. Before the war, the ECB was expected to remain on hold this year.
Inflationary pressures coming through
Monday’s bond rout followed a steep selloff last week, as investors were spooked by a recent raft of hotter-than-expected inflation figures globally, particularly in the United States.
“The fact that we are now seeing data backing up inflationary fears that have been in the market since the Middle East conflict started I think is key,” said Nick Twidale, chief markets analyst at ATFX Global.
Data last week showed U.S. consumer and producer prices surged in April, with similar readings seen in China, Germany and Japan.
Much emphasis had also been placed on a closely watched two-day summit between U.S. President Donald Trump and Chinese President Xi Jinping last week, but investor hopes the talks would produce a breakthrough in the Iran war fell flat.
Though the bond rout was global, many of the drivers were at least partly local in nature.
Britain last week was at the forefront of the selloff amid domestic political upheaval as Prime Minister Keir Starmer’s future was called into question after poor local election results, raising investor fears he will be forced out and replaced by a more left-wing challenger.
On Monday, however, gilts were an unusual outperformer, with the 10-year yield down 4 bps to 5.14%. It jumped 26 bps last week to an 18-year high of 5.187%.
-
Daily Agenda3 days agoVile slander about the son of AK Party member Seda Sarıbaş! The lie “He raided the school with a gun” collapsed!
-
Daily Agenda3 days agoJoint statement after the Unofficial Summit of the Organization of Turkic States! Emphasis on “Digital Turkish World”
-
Daily Agenda3 days ago‘Terror-free Türkiye’ message from Turkish Grand National Assembly Speaker Kurtulmuş: They have no choice but to lay down their arms
-
Daily Agenda3 days agoSpecial law for the Red Crescent: The bill was submitted to the Presidency of the Turkish Grand National Assembly!
-
Daily Agenda3 days agoMinister Göktaş: “We are building the Türkiye Century as a period in which we are more firmly fortified”
-
Daily Agenda3 days agoPresident Recep Tayyip Erdoğan is in Turkestan
-
Politics2 days agoTurkish prosecutors expand corruption operations in Istanbul, Denizli
-
Economy1 day agoTrump claims Iran war is worth the pain: Some rural voters agree