GDP in Turkey

Turkey GDP | Economic News & Forecasts

Turkey - GDP

Growth slows massively in Q3

According to data released by Turkstat on 10 December, the Turkish economy lost further steam in Q3, amid significant financial market and exchange-rate turbulence, soaring inflation and higher interest rates during the period. Economic growth dimmed to a mere 1.6% in Q3, below market expectations and down from Q2’s revised 5.3% (previously reported: +5.2% year-on-year).

Domestic demand weakened considerably in the third quarter. The expansion in private consumption slowed to 1.1% (Q2: +6.4% yoy), depressed by intensifying price pressures and weaker consumer sentiment. Meanwhile, fixed investment declined sharply (Q3: -3.8% yoy; Q2: +4.2% yoy) on lower investment in construction, and machinery and equipment. In contrast, government spending growth maintained the robust momentum observed in the build-up to the June elections (Q3: +7.5% yoy; Q2: +7.8% yoy).

The external sector strengthened notably in the third quarter, due to the weaker lira and soft domestic demand. Exports of goods and services increased 13.6% (Q2: +4.2% yoy), while imports contracted 16.7% (Q2: +0.2% yoy). As a result, the external sector contributed 6.7 percentage points to growth, up from Q2’s contribution of 0.9 percentage points.

Looking ahead, the economy is likely to contract over the next few quarters, as still-elevated price pressures, tight financial conditions and weak sentiment depress domestic demand. However, the external sector should continue to provide support thanks to increased price competitiveness. The economy should return to growth in the second half of next year as the impact of the currency crisis subsides.

FocusEconomics Consensus Forecast panelists see GDP expanding a mere 0.2% in 2019, with growth set to pick up to 3.3% in 2020.

Turkey - GDP Data

2013  2014  2015  2016  2017  
Economic Growth (GDP, annual variation in %)8.5  5.2  6.1  3.2  7.4  

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Turkey GDP Chart

Turkey GDP
Note: Annual variation of gross domestic product (GDP) in %.
Source: Statistical Institute and FocusEconomics calculations.

Turkey Facts

Bond Yield14.56-0.09 %Feb 14
Exchange Rate5.27-0.85 %Feb 14
Stock Market102,1301.41 %Feb 14

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