Turkey grows by 3 percent, exceeds expectations

ISTANBUL- Hürriyet Daily News

The economy’s growth exceeded both previous the quarter’s 1.4 percent and last year’s 2.2 percent, the gross-domestic product (GDP) data released by Turkish Statistical Institute (TÜİK) showed. DHA photo

The Turkish economy grew above expectations, rising by 3 percent in the first quarter of this year compared with the same period last year, but the level might not be sufficient to achieve the government’s 4 percent target for the year-end, the Turkish economy minister has said.

The economy’s growth exceeded both previous the quarter’s 1.4 percent and last year’s 2.2 percent, the gross-domestic product (GDP) data released by Turkish Statistical Institute (TÜİK) showed today.

Despite the data being higher than market expectations, which predicted around 2.3 percent, Turkish Economy Minister Zafer Çağlayan said the first quarter data was not at the desired level.

“First quarter growth is above my expectations, but it won’t be enough to achieve 4 percent annual growth,” Çağlayan told reporters during the signature ceremony of the Innovation Ateliers Protocol.

“I guess second and third quarter growths will be higher,” the minister noted, indicating he still had hope for reaching the year-end targets.

Turkey has been suffering from an economic slowdown due to low domestic demand in addition to stagnating exports which were the main force behind the impressive growth witnessed in 2011 and 2010.

The country had to content itself with 2.2 percent growth in 2012 after impressive figures of 9.2 and 8.8 percent growth rates in 2010 and 2011.

In a statement released after the data release, the minister warned that low exports would remain an issue for a while as there was no specific indication of a recovery in foreign markets.

“The contribution of net exports over growth won’t be as vivacious as in the past two years in our market as well. This year, the contribution of domestic income becomes more significant,” he said.

Turkey has been growing for 14 consecutive months and the growth rate for the first quarter of 2013 was the highest quarterly growth since last year’s first quarter.

Current account deficit remians risky

Meanwhile, right after TÜİK announced the growth rate of the economy for the first quarter, the Turkish Central Bank revealed the balance of payment realizations for the same interval.

Turkey recorded a current account deficit $24.3 billion in the first four months, indicating an increase of $3.5 billion over the same period of the previous year.

This development is mainly attributable to a $3.6 billion rise in foreign trade deficit, recording $25.6 billion, the Central Bank said.

Commenting on the current account gap as well, Çağlayan said the higher than expected deficit might come in May as well, but said that he did not expect the 7.1 percent current account deficit level to be passed by the year-end.