Turkish economy grows 7.6% in Q2 with domestic demand and exports

Turkey’s economy grew 7.6% in the second quarter from a year earlier, as expected, thanks to strong domestic demand and exports, according to data on Wednesday, although economic activity is expected to slow down. until the end of the year as demand cools.

Gross Domestic Product (GDP) grew by 2.1% compared to the previous quarter on a seasonally and calendar-adjusted basis, data from the Turkish Institute of Statistics showed.

President Tayyip Erdogan’s economic plan prioritizes growth, jobs, investment and exports, spurred by a series of unorthodox interest rate cuts that sparked a currency crisis and an inflationary spiral late last year.

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

Exports of goods and services increased 16.4% in the second quarter compared to a year ago in the chained volume index, while imports of the type increased 5.8%.

Household consumption added 13.6 percentage points to growth and external demand increased by 2.7 points.

In a Reuters poll, the economy was forecast to have expanded 7.5% in the second quarter, with annual growth of 4%.

Despite inflation at 80%, the Turkish central bank cut its benchmark interest rate by 100 basis points in August to 13%.

The institution cited indications of a slowdown in the third quarter, adding that the dynamism of industrial production and a positive trend in employment should be maintained.

Economists also see growth slowing in the second half of the year on a downward trend in domestic and external demand, led by an expected slowdown in Turkey’s biggest trading partners.