Gross domestic product at current prices amounted to $176.1 billion in the January-March period says the Turkish Statistical Institute.

A merchant counts Turkish lira banknotes at the Grand Bazaar in Istanbul, Turkey, March 29, 2019.
A merchant counts Turkish lira banknotes at the Grand Bazaar in Istanbul, Turkey, March 29, 2019. (Reuters Archive)

Turkey's economy grew 4.5 percent year-on-year in the first quarter of 2020, the country's statistical authority announced Friday.

According to the Turkish Statistical Institute (TurkStat), gross domestic product (GDP) at current prices amounted to 1.07 trillion Turkish liras ($176.1 billion) in the January-March period.

"Seasonally and calendar adjusted GDP increased by 0.6 percent compared with the previous quarter," the institute said.

The figure showed that the Turkish economy was less affected by the coronavirus compared to other big economies while it came at worse than analysts’ expectations.

A group of 16 economists surveyed by Anadolu Agency on Wednesday had projected the Turkish economy to expand 5.2 percent in the first quarter of this year.

Economists' forecasts hovered between 4.4 percent — the lowest estimate — and 5.8 percent.

The economists also predicted that Turkey's annual GDP in 2020 would narrow 1.5 percent on average.

Erol Gurcan, an economist at Gedik Investment, said the main driver of year-on-year growth was domestic consumption (household and public expenditures) whereas the investments and net exports handed negative contributions.

The negative impact of the virus was limited on the data as the first Covid-19 case was confirmed in Turkey in the late first quarter, he said, adding that leading indicators for the second quarter signal a significant slowdown in economic activity.

"Although high frequency data during the loosening in social distancing measurements starts to provide some recovery signs, we should state that these kinds of signs could be meaningful if they are sustained," he stressed.

TurkStat said in light of the activities constituting gross domestic product, the value added increased 3 percent in the agricultural sector and 6.2 percent in the industry sector in the first quarter, while dropped 1.5 percent in the construction sector.

The services sector's value added — wholesale and retail trade, transport, storage, accommodation and food service activities — went up 3.4 percent on a yearly basis.

Government final consumption expenditure grew 6.2 percent while gross fixed capital formation fell 1.4 percent in the first quarter of 2020 compared with the same quarter of the previous year.

The country's GDP expanded 6 percent in the last quarter of 2019, 0.9 percent in the third quarter after contracting 2.3 percent in the first quarter and 1.6 percent in the second on an annual basis.

Turkey's economic growth rate was 0.9 percent in 2019 and 7.4 percent in 2018.

Before the onset of the coronavirus crises, the economy was expected to grow 5 percent in 2020 as laid out in the country's new economic program announced in September.

Source: AA