Turkey: 7.4% economic growth in the third quarter

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The Turkish economy grew at a rate of 7.4% year-on-year in the third quarter, according to the statistical service Turkstat, but the sharp fall in the pound amid concerns about persistently high inflation has now plunged the country into a monetary crisis.

Growth in the quarter was supported by private consumption, which rose 9.1% year-on-year after the coronavirus restrictions were lifted in July.

Government consumption increased by 9.6%, while the formation of gross fixed capital decreased by 2.4%.

Net exports also led to growth, supported by strong export performance.

Exports of goods and services increased by 25.6% with external demand leading to increased tourist flows and shipments of goods, while imports decreased by 8.3%.

The statistical service revised its estimates for the second quarter GDP to 22% from 21.7%.

The economy grew at a record rate then due to the recovery of activity and the favorable comparison with 2020.

The easing of monetary conditions at the behest of President Erdogan paved the way for rising inflation and caused the pound frenzy, affecting household purchasing power and making critical imports, including energy and raw materials, much more expensive.

Erdogan has pushed the central bank to cut interest rates despite rising inflation, which reached almost 20% in October.

His support for further cuts last week dashed any hopes of a reversal, sending the pound to a record low.

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Source From: Capital

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