Turkey: Growth broadly stable in Q4
March 31, 2014
GDP rose 4.4% over the same quarter of the previous year in Q4, marking a slight acceleration compared to the 4.3% expansion recorded in Q3 (previously reported: +4.4% year-on-year). The reading overshot the 3.9% rise that market analysts had expected. In the full year 2013, GDP expanded 4.0%, which nearly doubled the 2.1% increase recorded in 2012.
The result tallied in Q4 reflected that an improvement in domestic demand was partially offset by a weaker external sector. Private consumption accelerated to a 5.3% expansion in Q4 (Q3: +4.7% yoy), while government spending increased a healthy 6.8% over the same quarter the previous year (Q3: +1.7% yoy). In addition, gross fixed investment rose a solid 6.4% in Q4 (Q3: +6.0% yoy).
Exports of goods and services declined 1.5%, which followed the 2.3% contraction tallied in the previous quarter. Imports grew 9.3% in Q4, which was above the 5.8% expansion recorded in Q3. As a result, the external sector's net contribution to overall growth deteriorated from minus 2.2 percentage points in Q3 to minus 3.0 percentage points in Q4.
A quarter-on-quarter analysis does not corroborate the mild acceleration suggested by the annual figures. GDP expanded 0.5% over the previous quarter in seasonally and calendar-day adjusted terms, which was down from the 0.8% rise recorded in Q3.
The Turkish government expects the economy to expand 4.0% in 2014 and 5.0% in 2015. FocusEconomics Consensus Forecast panelists see GDP expanding 2.2% this year, which is down 0.2 percentage points from last month's forecast. For 2015, the panel sees growth accelerating to a 3.7% increase.