Turkey: Economy slows to nearly two-year low in Q3
December 10, 2014
In Q3, GDP rose 1.7% over the same quarter last year, marking a deceleration compared to the revised 2.2% expansion recorded in Q2 (previously reported: +2.1% year-on-year). The reading undershot the 2.8% rise that market analysts had expected and represented the lowest growth rate since Q4 2012.
The result tallied in Q3 reflected a slight deterioration in both the external sector and domestic demand. Private consumption decelerated in Q3 to a 0.2% expansion over the same quarter last year (Q2: +0.5% yoy), while government spending accelerated to a 6.6% increase (Q2: +2.6% yoy). Gross fixed investment declined 0.4%, which marked an improvement over the 3.5% contraction tallied in Q2. Moreover, overall growth was dragged down by a sharp decline in inventories.
Exports of goods and services expanded 8.0% in Q3, which followed the 5.7% increase tallied in the previous quarter. Imports declined 1.8% over the same quarter last year (Q2: -4.4% yoy). As a result, the external sector’s net contribution to overall growth fell from 2.9 percentage points in Q2 to 2.5 percentage points in Q3.
A quarter-on-quarter analysis does not corroborate the deceleration suggested by the annual figures. GDP rose 0.4% over the previous quarter in seasonally- and calendar-day adjusted terms. The reading contrasted the 0.5% decrease observed in Q2.