Turkish economy exceeds expectations, expands 7% in Q1

ANKARA

Turkey's economy expanded 7% year-on-year in the first quarter of 2021 amid economic fallout from the coronavirus pandemic, according to the country's statistical authority on May 31. 

The country's gross domestic product (GDP) at current prices increased 29.1% to 1.4 trillion Turkish liras ($188.6 billion) in the January-March period, the Turkish Statistical Institute (TÜİK) said.

A panel of 21 economists polled by Anadolu Agency on Friday had projected that the Turkish economy would grow 6.4% on average in the January-March period, hovering between 5% and 7.2%.

Amid the pandemic, Turkey was one of the rare countries where negative growth did not occur and its economy grew by 1.8% in 2020.

Following the release of the growth data, the Turkish lira appreciated 0.73% at 8.48 versus the dollar. The lira started the new week at the level of 8.56 against the dollar.

Compared with currencies of developing countries, the Turkish lira gained the most value against the dollar on Monday, as the first-quarter growth data came out better than expected.

The country's gross domestic product (GDP) at current prices increased 29.1% to 1.4 trillion Turkish liras ($188.6 billion) in the first quarter of the year, the TÜİK said.

Alvaro Ortiz Vidal-Abarca, the chief economist for Turkey at Spanish-based BBVA bank said on Twitter: "Turkey's GDP grows at 7.0% in Q1 and stays near 23% in the second quarter."

"The data remind us that GDP will grow near or above 6% in 2021 and that controlling Inflation, not growth, should be the priority this year. Only by this will guarantee sustainable growth in 2022."

Value-added increased the most among financial and insurance activities constituting gross domestic product with 18.1% annually in the first quarter.

The figures rose 14.4% in other service activities, 11.7% in industry and 7.5% in agriculture during the same period.

Financial sector activity also rose by 2.9% followed by a 2.8% increase in the construction sector and 2.4% in real estate activities.

Government final consumption expenditure grew 1.3%, while gross fixed capital formation jumped 11.4% in January- March compared with the same quarter of the last year.

The final consumption expenditures of resident households gained by 7.4% in the same period, TÜİK said.

Exports of goods and services increased by 3.3%, imports diminished by 1.1%, it added.

Amid the pandemic, Turkey was one of the rare countries where negative growth did not occur and its economy grew by 1.8% in 2020.