Turkey GDP


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.

The Turkish government expects the economy to expand 4.0% in 2014 and 5.0% in 2015. FocusEconomics Consensus Forecast panelists are much less optimistic than the government and see GDP expanding 2.3% this year, which is up 0.1 percentage points from last month’s forecast. For 2015, the panel sees growth accelerating to a 3.6% increase.

Author: Ricard Torné, Lead Economist

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Turkey GDP Chart

Turkey GDP Q2 2014

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

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