Turkish growth accelerates to 11.7 pct as profits, shares rise

Turkish economic growth accelerated in the first quarter, recouping most of the output lost in last year’s slump as domestic demand drove the fastest expansion in almost six years, the Turkish Statistical Institute reported June 30. Gross domestic product increased 11.7 percent from a year earlier, compared with 6 percent in the previous three months. The economy is recovering from a 14.5 percent slump a year ago as record-low interest rates revive spending by Turkish consumers and companies.  “A bounce-back was inevitable but there are already signs of a loss of momentum,” said Cevdet Akçay, chief economist for Yapı Kredi Bankası. “Turkey’s advantage is that it has a large domestic market. Still, in the end it’s global dynamics that define what happens.”

1st Quarter YoY growth figures are good news for Turkey and PM Erdogan who hopes to win a third term in elections that must be held before July next year.  The sequential quarter-on-quarter numbers, however, show a very modest 0.1% GDP growth and, therefore, point toward a substantial softening of growth momentum that bears matching. At a minimum, it virtually assures no near-term increase in the CBT`s historically low interest rates.

Source: Hurriyet Daily


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