Turkey GDP

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Turkey: Growth inches down in Q1

June 10, 2014

GDP rose 4.3% over the same quarter last year in Q1, marking a slight deceleration compared to the 4.4% expansion recorded in Q4. The reading overshot the 4.2% rise that market analysts had expected.

The result tallied in Q1 reflected that an improvement in the external sector was more than offset by weaker domestic demand. Private consumption decelerated to a 2.9% expansion in Q1 (Q4: +5.3% year-on-year), while government spending increased a healthy 8.6% over the same quarter last year (Q4: +6.8% yoy). Gross fixed investment, however, fell 0.5% in Q1 (Q4: +6.4% yoy).

The sharp depreciation of the lira at the outset of the year drove exports of goods and services to expand a healthy 11.4% in Q1, which contrasted the 1.5% contraction tallied in the previous quarter. Consequently, imports grew a meager 0.8% in Q1, which was well below the 9.3% expansion recorded in Q4. As a result, the external sector’s net contribution to overall growth swung from minus 3.0 percentage points in Q4 to plus 2.7 percentage points in Q1.

A quarter-on-quarter analysis does not corroborate the mild deceleration suggested by the annual figures. GDP expanded 1.7% over the previous quarter in seasonally- and calendar-day adjusted terms, which was up from the 0.9% rise recorded in Q4.

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, Head of Economic Research

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Turkey GDP Chart


Turkey GDP Q1 2014 0

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


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