Turkey’s 3.8% GDP growth in Q2 beats expectations

By bne IntelliNews September 10, 2015

Turkish economy grew 3.8% y/y in Q2, beating the market consensus forecast of 3.5%, the statistics institute TUIK announced on September 10. The economy has grown by a revised 2.5% in the first quarter while H1 GDP growth stood at 3.1%.

The markets were expecting a more moderate growth in the second quarter, however, Turkey showed a better than expected performance although deterioration in preliminary indicators and on-going political tensions still keeps pessimistic estimations for the remaining of the year.

On the production side, services sector, which accounts to 58.4% of the economy in real terms, grew 4.1%, thanks to the significant growth rates achieved by financial services and insurance (9.1% growth in Q2, 12.6% share in overall GDP), wholesale and retail trade (2.6% growth in Q2, 13% share in overall GDP) and transportation (2.3% growth in Q2, 12.6% share in total) industries. Industrial production, which accounts to 34.6% of the economy in real terms, also grew 4.1% while manufacturing industry (25.9% share in overall GDP) grew 5% and construction output (5.9% share in total) grew 2% in the quarter. Agricultural production also showed a 6.7% growth in Q2 and took a 7.3% share in overall GDP.

On the consumption side, private consumption (65.6% share in Q2 in real terms) growth accelerated to 5.6% in the second quarter from 4.6% in Q1 while government consumption (11% share) growth jumped to 7.2% from 2.5%. Gross fixed capital formation (25.8% share) growth also jumped to 9.7% in the quarter from 0.4% a quarter ago, thanks to significant 11.4% growth in private sector’s investments (21.8% share in overall GDP). Exports (26.2% share in overall GDP), on the contrary, declined 2.1% in Q1.

Calendar-adjusted GDP growth stood at 3.8% y/y in Q2 while seasonally and calendar-adjusted growth stood at 1.3% q/q, TUIK data also showed. TUIK also calculated per capita GDP at $10,390 in the quarter.

Commenting on Q2 GDP data, Finance Minister Mehmet Simsek said on September 10 in a written statement that overall GDP growth in 2015 will possibly come below the government target of 4% due to political uncertainties and unfavorable conditions in the export markets, however, Turkish economy will continue moderate growth trend in the remaining quarters of the year.

Real GDP growth by Sectors

(%)

2014

Q1/14

Q2/14

Q3/14

Q4/14

H1/15

Q1/15

Q2/15

Agriculture, forestry and fishing

-2.1

3.7

-2.7

-5.1

1.3

5.2

2.9

6.7

Industry

3.5

6.3

3.3

2.8

1.8

2.3

0.4

4.1

   Mining and quarrying

5.6

7.7

8.6

4.2

2.4

-6.4

-8.1

-5.1

   Manufacturing

3.7

6.5

2.9

2.5

2.7

3.1

1.2

5.0

   Electricity, gas, steam and air conditioning supply

4.1

3.9

4.9

7.0

1.4

1.6

1.3

1.9

   Water supply, sewerage, waste management and remediation activities

10.8

11.7

10.6

11.7

9.2

7.9

6.8

8.8

   Construction

2.2

5.8

3.4

2.0

-2.1

-0.3

-2.8

2.0

Services

4.1

6.0

3.8

3.4

3.2

4.1

4.1

4.1

   Wholesale and retail trade

1.8

3.7

0.7

0.8

1.9

1.8

1.1

2.6

   Transportation and storage

2.8

3.7

2.9

2.7

2.1

1.8

1.3

2.3

   Accomodation and food service activities

2.8

1.7

2.8

4.0

1.5

3.7

4.9

2.6

   Information and communication

3.3

-2.2

5.6

3.2

6.6

4.3

9.5

-0.6

   Financial and insurance activities

7.0

14.0

7.1

5.2

3.0

7.8

6.7

9.1

   Real estate activities

2.6

2.1

2.1

2.4

3.8

4.0

4.1

4.0

   Professional, scientific and technical activities

10.8

11.8

9.8

10.8

10.7

12.4

14.1

10.2

   Administrative and support service activities

5.5

7.2

5.4

4.4

4.9

5.7

6.4

4.9

   Public administration and defence; compulsory social security

2.4

4.2

3.6

1.9

0.3

0.9

0.2

1.7

   Education

6.5

5.7

6.3

6.6

7.6

5.4

6.6

4.1

   Human health and social work activities

5.6

5.0

6.9

6.2

4.3

3.0

4.5

1.4

   Arts, entertaintment and recreation

6.9

12.5

7.4

5.5

1.7

3.7

2.4

5.3

   Other service activities

2.2

3.3

2.0

2.2

1.3

-0.2

0.1

-0.5

   Activities of household as employers

2.8

1.6

-1.8

5.8

5.3

-1.5

0.9

-5.2

Sectoral total

3.3

6.0

3.2

1.9

2.6

3.6

2.8

4.3

Financial intermediation services indirectly measured

7.3

16.7

10.3

2.6

2.5

12.6

9.6

15.8

Taxes-subsidies

2.5

5.4

0.6

1.1

3.2

7.9

6.5

9.4

Gross domestic product (Purchaser's price)

2.9

5.1

2.4

1.8

2.7

3.1

2.5

3.8

source: tuik

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