Turkey GDP


Turkey: Economy slows in Q1

June 10, 2015

In Q1, GDP rose 2.3% over the same quarter of the previous year, which was below the 2.6% increase recorded in Q4. Nevertheless, the reading came in above the 1.7% expansion the market had expected.

The result tallied in Q1 reflected a worse performance of the external sector while domestic demand improved. Growth in private consumption accelerated from 2.4% in Q4 to 4.5% in Q1. In addition, government consumption picked up pace, rising from a 1.7% expansion to a 2.5% Q1. In addition, fixed investment improved from a 1.0% contraction to flat growth in Q1.

Exports of goods and services contracted 0.3% in Q1, which contrasted the 3.4% expansion recorded in Q4 and marked the worst result in over one year. Imports expanded 4.1%, which was below the previous quarter’s 4.6% increase. As a result, the external sector’s net contribution to overall growth fell from minus 0.4 percentage points in Q4 to minus 1.2 percentage points in Q1.

A quarter-on-quarter analysis does not corroborate the deceleration suggested by the annual figures. GDP rose 1.3% over the previous quarter in seasonally- and calendar-day adjusted terms. The reading was up from the 0.8% increase observed in Q4.

The Turkish government expects the economy to expand 4.0% in 2015. FocusEconomics Consensus Forecast panelists are less optimistic than the government and see GDP expanding 3.2% this year, which is unchanged from last month’s forecast. For 2016, the panel sees the economy accelerating to a 3.7% increase.

Author: Angela Bouzanis, Senior Economist

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Turkey GDP Chart

Turkey GDP Q1 2015 0

Note: Year-on-year variation of GDP in %.
Source: Turkish Statistical Institute (TurkStat) and FocusEconomics Consensus Forecast.

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