Turkey’s economy grows by 7.4% in Q3 on back of demand, exports
Pedestrians wearing masks walk on the street, in the capital Ankara, Turkey, Nov. 28, 2021. (AFP Photo)

Turkey’s economy grows by 7.4% in Q3 on back of demand, exports

Turkey’s economy has expanded 7.4% year-on-year in the third quarter of the year, official data showed Tuesday, in line with market expectations and on the back of the strength of retail demand, manufacturing and exports.

The country’s gross domestic product (GDP) expanded 2.7% compared to the previous quarter on a seasonally and calendar-adjusted basis, data from the Turkish Statistical Institute (TurkStat) showed.

Growth in the second quarter was led by professional, administrative and support service activities, which expanded 25.4% annually, followed by information and communication sector expansion of 22.6% and services growth of 20.7%. The real estate sector expanded 4.7% year-on-year.

On the other hand, financial and insurance activities contracted by 19.9% in the July-September period, while the construction and agriculture industries narrowed by 6.7% and 5.9%, respectively, the data showed.

The total value of goods produced and services provided at current prices stood at TL 1.9 trillion ($225.5 billion) this July-September, TurkStat said.

Second-quarter growth was revised to a massive 22% annually from an initial 21.7%, rebounding after a sharp slowdown a year earlier due to COVID-19 restrictions.

The median estimate of 15 economists in a Reuters poll stood at 7.5% for year-on-year growth in the third quarter of the year. Forecasts ranged between 5.1% and 11.4% growth.

Still, soaring inflation remains the biggest issue ahead. The annual inflation rate rose to 19.89% year-on-year in October, according to official data, driven by food, services, housing and transportation prices, reflecting in part soaring world energy prices.

The central bank said temporary factors affecting inflation in the short term were expected to persist through the first half of 2022.

President Recep Tayyip Erdoğan has said Turkey will prioritize growth, employment and investments over high borrowing costs and a low exchange rate.

The median estimate of 15 economists in the Reuters poll for growth in 2021 as a whole stood at 9.5%, with forecasts ranging between 8.9% and 11%.

The government has recently said it expects to record double-digit growth this year, revising up an earlier estimate of 9%.

The economy grew 1.8% last year, despite a 10.4% contraction in the second quarter, one of only a few globally to avoid annual contraction amid the initial pandemic fallout.

This article originally appeared in DAILY SABAH on 30 Nov 2021.