Turkey's gross domestic product (GDP) grew by a greater-than-expected 4.4 percent year-on-year in the third quarter, data from the Turkish Statistics Institute (TurkStat) have shown, boosted by strong domestic demand which offset a weaker export performance.
This means that the economy grew by 4 percent in the first nine months of 2013. This also marks the 16th quarter in a row that the Turkish economy has grown. The total GDP generated in the first nine months of the year amounted to TL 91.22 billion.
The International Monetary Fund (IMF) forecasts a 3.8 percent growth rate for Turkey this year while the government has revised its year-end growth target to 3.6 percent from the previous 4 percent. The Q3 growth rate was above the expected 4.2 percent increase. The economy had expanded by 4.5 percent in the preceding quarter.
Turkish household spending increased by 5.1 percent in the third quarter while government spending only grew by 0.6 percent. Investment surged by 6 percent over last year. The country's imports grew by 6 percent on higher demand in the third quarter while exports declined by 2.2 percent. The Organization for Economic Cooperation and Development (OECD) forecasts that Turkey will grow by around 4 percent in both 2014 and 2015.
Evaluating the figures for Tuesday, Economy Minister Zafer Çağlayan said in Ankara that Turkey managed to be one of the fastest growing economies among members of the G-20 and the OECD. “We were one of the first countries to emerge from the 2008 global financial crisis and this is the 16th quarter in a row that our GDP has expanded.” Looking at earlier domestic demand, energy consumption and industrial production figures, Çağlayan said the government had been expecting this growth rate in the third quarter.
Çağlayan said the final quarter could see a relatively weaker growth, however, adding that the year-end target will most likely be realized now. The economy needs to achieve at least 2.5 percent growth in the final three months to realize the annual 3.6 percent growth target.
In comments on growth figures, Science, Industry and Technology Minister Nihat Ergün said on Tuesday in Ankara that Turkey's industrial output performance has helped growth to hover around high levels, adding that the current figures prove that the economy can do even better.
The statements from the government suggest that officials in Ankara regret having slashed the growth targets for the year-end. An upward revision in growth goals, however, is unlikely at this stage.
Despite a stable growth, Turkey still has to deal with a crippling current account deficit (CAD) -- now more than 7 percent of GDP. This results in a dependence on inflows of often speculative cash to fund this high gap. Turkey should prepare itself for a period of more modest growth until its CAD is lowered permanently, Finance Minister Mehmet Şimşek said last month.
In other cautious comments, Deputy Prime Minister Ali Babacan had earlier said “growth is necessary but improved prosperity and welfare, education reform, justice and social security and increased sensitivity toward the environment are also crucial points that need greater attention.”