In 2009, industrial employment contracted by 7 percent, whereas, employment in the construction sector and services sector increased by 0.6 percent and 1.4 percent, respectively. Employment by Sectors (Percent) 80  60  40  20  0 2004  2005  2006 Farm  2007  2008  2009  No n-Farm  Source: TURKSTAT. 19. Demographic changes in Turkey leads to an increase in the share of the working population in the overall population and this, in turn, results in the unemployment to persist. However, the recent upsurge in the unemployment rate is mainly attributable to cyclical rather than structural factors. The economic contraction in 2009 increased the labor force participation rate while significantly curbing the pace of employment growth; hence the unemployment rate increased rapidly. BIS Review 68/2010  7  20. The labor force is comprised of 23,8 million people in 2008 and rose to 24.7 million people in 2009 by an increase of 4 percentage points, whereas, employment increased by a mere 0.4 percent, from 21.2 million to 21.3 million people. In this period, the rapid increase in labor force participation while employment remained much the same, caused the unemployment rate to climb to 14 percent in 2009 from 11 percent in 2008. Meanwhile, the non-farm unemployment rate increased from 13.6 percent to 17.4 percent. 21. As I mentioned in my previous presentations, creating new employment opportunities for the growing labor supply in Turkey is contingent upon carrying out cost-reducing and resilience-enhancing reforms in labor markets.
Source: Ministry of Finance, Medium Term Program (2010-2012). 28. The determined implementation of fiscal discipline in Turkey since 2002 has helped cut the ratios of government budget deficit and debt to GDP, to a level well below the average of both advanced and emerging economies. Although Turkey’s budget deficit expanded at a faster pace than in many other emerging economies in 2009, according to the MTP projections, government debt stock is likely to remain below the average of other emerging economies in the upcoming years. 10  BIS Review 68/2010  General Government Budget Deficit and Debt Ratio Average Values in Advanced Countries and Turkey  Average Values in Emerging Countries and Turkey  (Percent of GDP)  (Percent of GDP)  100  Aver age of A dvan ced Cou ntrie s**  80 2 008 70 2 003  2003  60 50  20 12  40 2 008  2003  2 003  60 55 2012 50 2 008  45  2012  40  Tur key  Tu rkey  2008  30  35  -2  0  2  4  6  8  10  Budg et D eficit  *Dashed lines indicate forecasts. **Includes USA, UK, Germany, France, Spain, Ireland, Iceland, Japan, Portugal, Israel, Greece, Italy, Austria, New Zealand and South Korea. Source: IMF. Turkish data is taken from the Ministry of Finance, Undersecreteriat of Treasury, Medium Term Program (2010-2012) and Program for 2009. 29.