Turkish economy grew 0.9 percent in Q3: report

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Photo by M. B. M. (Unsplash)

Turkey’s economy grew 0.9 percent year-on-year in the third quarter, breaking three consecutive quarters of contraction as it shook off a recession that followed last year’s currency crisis, Reuters reported.

Turkey has a track record of 5 percent growth, but a 30 percent slide in the lira last year pushed up inflation and interest rates, while domestic demand tumbled. The central bank has since slashed rates to revive activity.

The government has forecast 5 percent growth next year, and Finance Minister Berat Albayrak wrote on Twitter that leading indicators for the fourth quarter showed growth momentum was continuing to increase.

But economists say achieving the government’s target could prove difficult.

The third quarter growth was driven by the agricultural sector, which expanded 3.8 percent, while industry grew 1.6 percent and services grew 0.6 percent. However, the construction sector, which underpinned years of strong economic growth in Turkey, shrank 7.8 percent, the Turkish Statistics Institute (TurkStat) said.

Compared to the second quarter, gross domestic product expanded by a seasonally and calendar-adjusted 0.4 percent, its third positive quarter-on-quarter reading in a row, TurkStat data showed.

In late October the central bank slashed its policy rate more than expected, to 14 percent, continuing an aggressive bout of cuts from 24 percent since July to help revive the recession-hit economy.

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