NEWS ARTICLE        27/03/2023

Lack of confidence in statistics prepared by TurkStat complicates analysis of the state of the Turkish economy

Turkey's statistical institution, TurkStat, has been criticized for inaccurate statistics in recent years. These criticisms have come from both domestic and international sources, and have focused on a variety of issues, including the accuracy of economic growth figures, inflation statistics, and unemployment rates.

 

One of the most significant criticisms of TurkStat is that its economic growth figures are inflated. In recent years, Turkey has claimed some of the highest GDP growth rates in the world, with figures reaching as high as 11.4% in 2021 at a time when global recovery from the covid pandemic had only just begun. Many experts have questioned the accuracy of these figures in light of Turkey's low investment and productivity levels, and its poor industrial performance. One factor that may have contributed to inaccurate economic growth figures is TurkStat's methodology for calculating GDP. In 2019, the institution revised its methodology for calculating GDP, which resulted in an upward revision of the country's GDP figures for previous years. Critics argue that this revision was politically motivated, designed to make the government look more successful than it actually is. Following the failed coup attempt in July 2016, the badly shaken Turkish economy contracted in the third quarter of 2016. To rescue the situation, the government changed the method of calculating GDP in December 2016, ostensibly to "bring it into line with international standards". Past and present GDP figures and GDP per capita levels soared. 2015 GDP growth increased from 4.1% to 5.9%, and the final GDP growth figure for 2016 was recorded as 3.2% after a number of revisions, and despite a contraction of 1.3% (originally 1.8%) in the third quarter of 2016.

 

TurkStat's data collection methods have also been called into question, with some experts arguing that inadequate methodology is employed in data collection, processing, and analysis, and that the institution relies too heavily on data provided by the government and does not have sufficient checks and balances in place to ensure accuracy.  TurkStat has been accused of a lack of transparency and for having its work conducted by a group of people who are ill-equipped and lack the proper training in statistical work. It has been recommended that the institution should publish comprehensive guidelines that dictate the exact steps used to collect data from respondents.

 

Another area in which TurkStat has been criticized is inflation statistics. Turkey has been grappling with high inflation rates for years. However, many experts have argued that TurkStat's inflation figures do not accurately reflect the true cost of living in Turkey. Some have suggested that the institution's calculation of the inflation rate is based on a basket of goods and services that is not representative of what the average Turkish citizen actually buys. Others have pointed to the fact that TurkStat's inflation figures are often revised upwards several months after they are first released, indicating that the institution may not be accurately capturing inflation in real-time. Such is the lack of confidence in TurkStat’s inflation figures that the figures prepared by the university based ENAG Inflation Research Group, which are at least twice as high, are widely accepted as offering a more realistic picture.

 

The consequences of inaccurate inflation statistics can be severe. Inflation erodes the value of currency, which can lead to decreased purchasing power and higher prices for essential goods such as food and housing. If TurkStat's inflation figures are inaccurate, the government may not take appropriate action to address inflation, which could exacerbate the problem and harm Turkey's economy and society.

 

A third area in which TurkStat has been criticized is unemployment statistics. Turkey's unemployment rate has been high for many years, with figures reaching as high as 13.7% in 2019, but subsequently being brought down to just over 10%. Some experts have questioned the accuracy of these figures, pointing to the fact that the institution's definition of unemployment may be too narrow. TurkStat defines unemployment as individuals who are not currently working but are actively seeking employment. This definition excludes individuals who have given up looking for work or who are underemployed, which could lead to an underestimation of the true unemployment rate in Turkey.

 

The consequences of inaccurate unemployment statistics are also severe. High levels of unemployment can lead to social unrest, decreased economic growth, and increased poverty. If TurkStat's unemployment figures are inaccurate, the government may not take appropriate action to address the problem, which could harm Turkey's economy and society in the long term.

 

In addition to these specific criticisms, TurkStat has also faced broader criticisms related to transparency and independence. Some experts have argued that the institution is not sufficiently transparent about its data collection methods or its decision-making processes. Additionally, some have suggested that the institution is not sufficiently independent from political influence, which could lead to biased or inaccurate statistics.

 

The consequences of a lack of transparency and independence can be significant. Without transparent and independent institutions, citizens may not trust the data being presented to them, which can lead to a lack of confidence in government policies and decisions. This can have a negative impact on the country's economic and social stability.

 

Moreover, inaccurate statistics can also harm Turkey's international reputation. Investors and international organizations such as the International Monetary Fund (IMF) rely heavily on accurate economic data when making investment and policy decisions. If Turkey's statistics are inaccurate, this can lead to a lack of trust in the country's economy and may make it more difficult for Turkey to attract foreign investment and financial support from international organizations.

 

To address these criticisms, TurkStat has taken some steps to improve its methodology and transparency. In 2020, the institution launched a new data platform, which provides more detailed information on the data it collects and the methodology it uses to calculate statistics. Additionally, TurkStat has established partnerships with other international statistical organizations to improve its data collection and analysis capabilities.

 

However, more needs to be done to ensure the accuracy and independence of TurkStat's statistics. Some experts have suggested that the institution needs to be given more independence from political influence, and that its decision-making processes should be more transparent. Additionally, TurkStat may need to revise its methodology for calculating GDP, inflation, and unemployment to ensure that these figures accurately reflect the true state of Turkey's economy.

Turkey’s net minimum wage has been raised 49% to TL 17,002 (USD 577) as of 01.01.2024       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s official annual inflation rate increases marginally to 64.86% in January 2024       Turkey’s official unemployment rate is 8.8% in December 2023       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 85,372,377 as of 2023 yearend       No. of foreigners visiting Turkey in 2023 increases 10.4% to 49.2 million       Turkey’s private sector foreign debt is USD 164.4 billion as of yearend 2023       Turkey’s economy grew 5.5% in 2022       FDI to Turkey is USD 10.6 billion in 2023       Turkey’s current account deficit is USD 45.2 billion in 2023