Mehmet KAYA / ANKARA
According to the data of SPM, which publishes the August Economic Difficulty Index (EZA) Bulletin prepared by the Social Policy Research and Application Center (SPM), the difference between the classical misery index and the Expanded Misery Index (GSE) created by SPM specifically for Turkey. Although it contracted for a short period of time, it continued its opening trend. The widening of this difference shows that the negative effect of the misery index, which is the sum of the classical inflation and unemployment rate, is aggravated under the conditions specific to Turkey when the scope of the GSE is taken into account. On the other hand, SPM started to explain the EZA, which was stopped due to the methodology change by TURKSTAT, again on the basis of the misery index.
The classic misery index is given as the sum of the CPI and the seasonally adjusted unemployment rate. This index, under the assumption that inflation and unemployment are the main indicators of the economic hardship experienced by the people, an index consisting of the sum of the two is assumed to show the increase or decrease in the economic hardship experienced by the people. SPM, on the other hand, developed a model in which not only the unemployed, but also the potential workforce, who are not counted as unemployed as per the statistical rule, would like to work even though they are not working in a job. In this model, which SPM calls the Expanded Misery Index (GSE), the index is not the sum of the CPI and the unemployment rate, but the sum of the CPI and the “combined ratio of the unemployed and potential labor force”, which was also created by TurkStat. In order to see the effect of the epidemic, SPM chose January 2019 as the base month and converted the index into an index. It was published with the GSE Economic Difficulty Index (EZA) bulletin.
Increase in GSE due to inflation
SPM Director Prof. Dr. In the study prepared by Researcher Aylin İngenç under the supervision of Serdar Sayan and based on the quarterly data of TURKSTAT, GSE increased by 6.4 points in June 2022 compared to May and became 100.4. “The value is also 4.7 points higher compared to the same period of the previous year. It is worth noting that almost 100% of the 6.4 points (6.8%) increase in the GSE is due to the increase in inflation”.
EZA2 index fell in the first quarter of the year
The Economic Difficulty Index, created by SPM, has been re-disclosed based on quarterly data. According to the SPM EZA bulletin, economic difficulties, which reached their highest level in the last quarter of 2021, continued to remain at high levels even though they decreased in the first quarter of 2022. The EZA2 index, which includes those working in precarious and fragile jobs, declined in the first quarter of 2022 and remained below the same period of the previous year. In the statement made by SPM, it was stated that the Extended Misery Index will continue to be announced monthly and the EZA indices will continue to be announced quarterly.