Turkey: GDP slows sharply in Q2
September 10, 2014
In Q2, GDP rose 2.1% over the same quarter last year, marking a sizeable deceleration compared to the revised 4.7% expansion recorded in Q1 (previously reported: +4.3% year-on-year). The reading undershot the 2.8% rise that market analysts had expected and represented the lowest growth since Q4 2012.
The result tallied in Q2 reflected that a slight improvement in the external sector was more than offset by weaker domestic demand. Private consumption decelerated to a 0.7% expansion over the same quarter last year in Q2 (Q1: +4.0% yoy), while government spending moderated to a 2.4% increase (Q1: +9.2% yoy). Moreover, gross fixed investment declined further to a 3.5% drop (Q1: -0.2% yoy), which marked the largest contraction since Q2 2012.
Exports of goods and services expanded 5.5% in Q2, which followed the 11.1% increase tallied in the previous quarter. Conversely, imports declined in Q2 at the fastest pace in over two years, falling 4.6% over the same quarter last year (Q1: +0.7% yoy). As a result, the external sector’s net contribution to overall growth rose from 2.6 percentage points in Q1 to 2.9 percentage points in Q2.
A quarter-on-quarter analysis corroborates the deceleration suggested by the annual figures. GDP fell 0.5% over the previous quarter in seasonally- and calendar-day adjusted terms, which contrasted the 1.8% increase observed in Q1 and marked the largest contraction since Q1 2009.