Turkey’s growth expanded 3.8 percent in the second quarter of 2015, the year-on-year growth rate was expected to advance by around 3.3 percent, seasonally and calendar adjusted growth increased 1.3 percent compared to the previous quarter.
According to data released by the Turkish Statistical Institute, Turkish economy grew 3.1 percent in the first half of 2015.
Despite posting a better-than-expected growth rate, analysts believe the Turkish economy’s growth is still below its potential. This is mostly linked to the high interest rates adopted by the Turkish Central Bank, as well as uncertainty in global markets. US Federal Reserve's potential interest rate hike and slowdown in Chinese economy are posing a downward pressure on global markets.
Finance Minister Mehmet Simsek thinks the expansion of the Turkish economy is based on strong sales increase in automotive, construction and domestic appliances sectors, and growth in third quarter will continue to be in a positive trend. However, he said, “Due to uncertainty in global markets, the Turkish economy might grow below the targeted 4 percent in 2015.”
Simsek also praised the structural reforms implemented in past 13 years and emphasized both strong fiscal balances and solid banking sector being successful outcomes of that transformation.
According to the Turkish government’s medium term targets, the economy is expected to grow 4 percent in 2015. The Turkish economy expanded 2.9 percent in 2014.
Meanwhile, in a seperate report released by the Central Bank of Turkey, Turkey's current account deficit kept its downward trend in July as well. Known as the soft-spot of Turkish economy, the current account deficit narrowed to $3,15 billion, marking a decline from June data.
According to the Turkish Central Bank, during the January-July period the current account deficit narrowed to $25.43 billion. The Turkish government’s medium term programme foresees Turkey’s current account deficit should reach $46 billion, or 5.4 percent of GDP by the end of 2015.