Turkish economy beats expectations, growing four percent

Turkish GDP grows four percent in third quarter of 2015 beating market expectation of 2.7 percent

Photo by: AA
Photo by: AA

Turkey's economy grew at the rate of 4 percent in the third quarter from the same period in the previous year, the Turkish Statistical Institute (TurkStat) reported on Thursday.

The figure exceeded analyst consensus estimates of 2.7 percent, the report said.

"Solid domestic demand continues to fuel growth in Turkey." Christopher Dembik, an economist with Saxo Bank, told Anadolu Agency on Thursday.

Household final consumption expenditure increased by 10.6 in the quarter at current prices, the report said.

The Consumer Confidence Index increased to 77.15 in November from 62.78 in October. Readings above 50 indicate a sharp improvement.

"Consumers had held back spending when the Turkish lira lost value earlier this year. Now that it has stabilized, confidence in spending has returned." Dembik added.

Growth was up from 3.8 percent in the second quarter. The nine months growth rate of GDP increased by 3.4 percent in the third quarter of 2015, the report said.

Increasing agricultural activity contributed the most to the GDP increase; the sector increased by 20.1 percent at current prices from the same quarter in 2014, the report said.

The value added by industry increased by 7.5 percent in the quarter, the research said. Services' contribution rose 11.2 percent in value.

Industrial production rose 4.6 percent in October from October 2014 in Turkey, according to a separate report from TurkStat.

"Increases in German manufacturing have meant that Turkish producers can benefit, as Germany is Turkey's largest market for the export of intermediate goods" commented Bora Tamar Yilmaz, an economist with Ziraat Securities in Istanbul in a note published on Tuesday.

Dembik pointed out that exports are expected to increase in the coming year as the EU, Turkey's largest export market, sees economic growth thanks to the stimulus program of the European Central Bank.

Exports may replace domestic demand as the principal driver of growth in Turkey in the coming year, he added.