Turkey’s economy expanded 7.6% in the second quarter

Turkey’s economy expanded 7.6 percent year-on-year in the second quarter, as expected, extending the streak thanks to strong domestic demand and exports, Reuters data showed on Wednesday, although economic activity estimated that it will slow by the end of the year as demand recedes.

GDP expanded by 2.1 percent compared to the previous quarter on a seasonally and calendar-adjusted basis, according to data from the Turkish Statistical Institute.

Turkish President Tayyip Erdogan’s economic plan prioritizes growth, jobs, investment and exports, led by a series of unorthodox interest rate cuts that sparked a currency crisis and spiraling inflation late last year.

Rising prices helped boost spending, while the fall in the pound helped boost exports.

Exports of goods and services rose 16.4% in the second quarter from a year ago, while imports rose 5.8%.

Household consumption added 13.6 percentage points to growth and external demand boosted it by 2.7 points, according to bankers’ calculations.

Jason Tuvey, senior emerging markets economist at Capital Economics, said measures to support households in the face of surging inflation helped support consumer spending.

The financial and insurance sector led the growth, expanding by 26.6%, followed by the services sector at 18.1%. The industrial sector expanded by 7.8%.

In a Reuters poll, the economy was expected to have expanded 7.5 percent in the second quarter and growth for the full year was estimated at 4 percent.

Despite inflation running at 80%, the central bank cut interest rates by 100 basis points in August to 13%. The Bank cited signs of a slowdown in the third quarter, adding that the momentum of industrial production and the positive employment trend should be maintained.