World Economy

Turkey GDP Beats Forecasts, But Current Account Deficit Rises

The government is aiming for 5.5% annual economic growth through 2020.The government is aiming for 5.5% annual economic growth through 2020.

Turkish economy expanded by 7.4% in the first quarter of this year compared with the same period last year, the Turkish Statistical Institute, TurkStat, revealed on Monday.

The three-month gross domestic product at current prices climbed to around 792.7 billion Turkish liras (nearly $207.5 billion), according to TurkStat data, Anadolu Agency reported.

A group of 19 experts questioned by Anadolu Agency expected the Turkish economy to grow by 6.9% in the first quarter of 2018.

The total value-added services and industry rose by 10% and 8.8%, respectively, while the construction sector saw a 6.9% rise. The agricultural sector posted a 4.6% hike from January to March, compared to the same period in 2017.

Muammer Komurcuoglu, an economist at IS Investment, said in a client note the economy maintained its strong growth through sizeable support from domestic consumption. He said the figure showed that investments had strengthened in the first quarter. He added that leading indicators suggested a loss of momentum as of the second quarter.

Turkey’s GDP was 3.1 trillion Turkish liras (nearly $850.7 billion) last year, up from 2.6 trillion Turkish liras in 2016.

The US dollar/Turkish lira exchange rate was 3.64 on average last year while one dollar was traded for 3.03 Turkish liras in 2016.

According to the TurkStat’s revised data, the country’s economy grew by 7.4%, year-on-year, last year, which was the highest annual growth rate since 2013; it was 3.2% in 2016.

The government is aiming for 5.5% annual economic growth through 2020 under its medium-term program.

Meanwhile, Turkey’s current account deficit hit $5.43 billion in April, marking an increase of $1.7 billion, year-on-year, Turkish Central Bank, or CBRT, announced on Monday.

According to the CBRT report on balance of payments, the country’s 12-month rolling deficit reached nearly $57.1 billion in April.

“This development in the current account is mainly attributable to $1,817 million increase in the goods deficit, recording net outflow of $5,462 million and $279 million increase in primary income deficit to $1,489 million,” the bank said.

This is while services surplus recorded a net inflow of $1.47 billion, up $375 million, year-on-year, in April. Travel, a major item under services, recorded a net inflow of $1.12 billion in April, increasing by $366 million compared to the same month in 2017, the bank added.

The CBRT also reported that the country’s current account gap in the first four months of this year amounted to around $21.8 billion, rising from $9.7 billion compared to the same period last year.

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