Turkey’s 2.3% GDP growth in Q1 beats expectations

By bne IntelliNews June 10, 2015

Turkey’s economic growth decelerated from 2.6% y/y in Q4 to 2.3% y/y in the first quarter of 2015, however, beat the market consensus forecast of a 1.6% y/y GDP growth.

On a seasonally and calendar adjusted basis, Turkey’s GDP growth came in at 1.3% q/q, edging up from the 0.8% q/q in Q4/2014. On a calendar-adjusted basis, the economy grew by 2.4% in Q1 versus a revised 2.5% y/y in Q3.

Domestic demand, which accounted for 69.7% of GDP (in constant prices) in Q1, grew 4.5%, up from a 1.3% growth last year, but investments grew just 0.04%, however a better figure compared to 1.3% contraction in 2014, data of the statistics office TUIK showed on June 10. The increase in government final consumption expenditures came in at 2.5% y/y in the first quarter versus 1.7% y/y in Q4/2014 and 4.6% in 2014 as a whole. Private investments rose by 1.9% y/y in the first quarter after rising 0.5% y/y in 2014 while public investments fell by 10.2% y/y that came on top of the 8.8% y/y decline in the whole of 2014.

Exports declined by 0.3% y/y in the first quarter of 2015 versus 6.8% y/y increase in 2014 while imports increased by 4.1% y/y after registering a 0.2% y/y decline in 2014 as a whole.

On the production side; the increase in industrial output slowed to 0.04% y/y in Q1 from 1.8% y/y in Q4/2014 while manufacturing production rose 0.8% after a 2.8% y/y increase in the previous quarter. The construction sector, which the government regards as one of the main engines of economic growth, contracted by 3.5% y/y in Q1 after registering a 2% contraction in the last quarter of 2014. The wholesale & trade industry grew by 1% y/y, down from 1.5% y/y in Q4/2014, while the growth rate of the service industry accelerated to 4.1% y/y in Q1 from 3% in the previous quarter.

Turkish economy has grown 4.9% in Q1/2014. The economy expanded at an annual rate of 2.9% in the whole of 2014, less than the government’s 2014 target of 3.3%. This was also below the 4.2% growth rate recorded in 2013. The government expects the Turkish economy to grow by 4% this year and to create an $850bn economy but the markets foresees a more moderate GDP growth of about 3%.

Real GDP growth by Sectors
(%) 2014 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15
Agriculture, forestry and fishing -1.9 3.5 -2.6 -4.9 1.4 2.7
Industry 3.5 6.2 3.3 2.9 1.8 0.0
   Mining and quarrying 5.6 7.7 8.6 4.2 2.5 -8.1
   Manufacturing 3.7 6.3 3.0 2.7 2.8 0.8
   Electricity, gas, steam and air conditioning supply 3.5 3.4 4.6 6.4 0.3 1.8
   Water supply, sewerage, waste management and remediation activities 11.0 11.8 10.8 12.1 9.2 6.8
   Construction 2.2 5.8 3.4 2.0 -2.0 -3.5
Services 4.0 5.8 3.7 3.5 3.0 4.1
   Wholesale and retail trade 1.4 3.2 0.2 0.8 1.5 1.0
   Transportation and storage 2.6 3.3 2.8 3.1 1.4 1.1
   Accomodation and food service activities 2.8 1.7 2.8 4.0 1.5 4.8
   Information and communication 3.4 -1.5 5.5 2.8 6.6 9.2
   Financial and insurance activities 7.0 14.0 7.1 5.2 3.0 6.7
   Real estate activities 2.6 2.1 2.1 2.4 3.8 4.1
   Professional, scientific and technical activities 10.8 11.7 9.7 10.8 10.7 14.0
   Administrative and support service activities 5.5 7.1 5.2 4.7 4.9 6.2
   Public administration and defence; compulsory social security 2.7 4.2 3.6 1.9 1.5 0.4
   Education 6.7 5.7 6.3 6.5 8.6 6.3
   Human health and social work activities 5.7 5.1 7.0 6.3 4.4 4.5
   Arts, entertaintment and recreation 6.9 12.4 7.4 5.6 1.9 2.3
   Other service activities 2.1 3.3 1.6 2.2 1.5 0.1
   Activities of household as employers 2.7 1.5 -1.8 5.9 5.3 0.8
Sectoral total 3.3 5.8 3.1 2.0 2.5 2.6
Financial intermediation services indirectly measured 7.3 16.7 10.3 2.6 2.5 9.6
Taxes-subsidies 2.6 5.2 0.8 1.4 3.2 6.5
Gross domestic product (Purchaser's price) 2.9 4.9 2.3 1.9 2.6 2.3
source: tuik            

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