Turkey: Surging investment pushes Q4 growth above expectations
March 31, 2011
In the fourth quarter, GDP soared 9.2% over the same quarter last year. The figure represented a marked acceleration compared to the 5.2% expansion recorded in Q3 (previously reported: +5.5% year-on-year) and overshot market expectations, which had anticipated a less pronounced 7.4% rise. The improvement in the final quarter of 2010 reflected a surge in investment, which skyrocketed 42.1% over the same period last year (Q3: +30.0% yoy), boosting domestic demand growth to 14.7% (Q3: +9.6% yoy). Private consumption followed suit, accelerating from the 6.5% annual rise tallied in the previous quarter to 9.0% in the fourth. Moreover, domestic demand was fanned by a rebound in government consumption, which expanded 3.2% over Q4 2009 (Q3: -0.9% yoy). Meanwhile, the net contribution from the external side of the economy remained negative, as imports continued to outpace exports. Exports of goods and services swung from a 1.6% drop in Q3 to a 4.3% expansion in Q4. Imports, on the other hand, remained resilient, adding 25.4% (Q3: +16.2% yoy). As a result, the net contribution from the external sector to overall growth deteriorated from minus 4.3 percentage points in the third quarter to minus 5.3 percentage points in the fourth. A quarter-on-quarter analysis corroborates the notion of an accelerating economy, as GDP jumped 3.6% over the previous quarter in seasonally and calendar-day adjusted terms. The result, which tripled the 1.2% expansion tallied in Q3, contributed for the stellar growth of 8.9% in the full year 2010 ? the fastest pace since 2004. After having successfully recovered from the 4.8% contraction recorded in 2009, the government expects economic growth to moderate to 5.0% in 2011.