Turkey Economy Grows 5.2 Percent

Turkish economy grew by 5.2% in the second quarter of this year compared with the same period last year, the country’s statistical authority announced Monday.     

The lira firmed to 6.47 against the dollar after the data from around 6.485 beforehand,  Anadolu Agency reported.

Second quarter gross domestic product expanded a seasonally and calendar adjusted 0.9% from the previous quarter, data from the Turkish Statistical Institute TUIK showed.

According to a Reuters poll, the economy is expected to grow 3.3% in the year as a whole. Official data also showed that the economy expanded 7.4% in 2017, matching previously released data.

“In 2017, the manufacturing industry had the largest share (in GDP) with 17.6%,” it said. “Manufacturing industry was followed by wholesale and retail trade and construction industry with 11.9% and 8.6%, respectively.”     

The institute noted that services of households as employers had the lowest share in GDP.

While growth for the Turkish economy in the second quarter was 7.4%, it was overshadowed by a rise in Ankara’s current account deficit and soaring inflation levels.

Inflation is expected to creep higher towards 20% this quarter, while growth is expected to drop below 7%. A combination of rising interest rates in the US and high-levels of dollar-denominated debt held by emerging market countries has raised investor panic over the ability of these countries to service increasingly costly debt. Meanwhile, the lira has fallen by over 50% since the start of the year, although indications by the Turkish central bank will make a much needed interest rate increase has stemmed its fall in recent weeks.    

Meanwhile, Turkey topped the list among OECD member countries and came second among EU members who have so far announced their annual growth performances for the second quarter.