Turkish economy grows above forecasts, hopes rise for 4 pct target
The Turkish economy grew above expectations at 4.4 percent in the third quarter year-on-year. The government, which had revised its growth forecast from 4 percent to 3.6 percent, is now hopeful of reaching 4 percent growth by the end of this year Hurriyet Daily News reported.
Turkey's gross domestic product increased based on domestic demand in the third quarter, compensating weaker export performance, private sector investments and inventory variations.
The economy showed 4.4 percent growth in the third quarter compared to the same period a year earlier, growing 4 percent in the first nine months of this year overall, according to figures revealed by the state-run statistics body TUİK yesterday.
"Developments in the foreign conjuncture will positively affect our growth in the fourth quarter. Growth may be close to 4 percent in 2013," Economy Minister Zafer Caglayan said in a written statement.
Caglayan stated that Turkey, which emerged rapidly from the 2008 global economic crisis, has grown continually over the last 16 quarters, and added that the Turkish economy was one of the fastest growing economies in Europe, the OECD and the G-20.
He said developments in industrial production, domestic demand and energy consumption had shown that Turkey was going to reach high growth figures, but added that growth may still be lower in the fourth quarter, despite the economy apparently growing above the medium-term target of 3.6 percent.
Technology Minister Nihat Ergun also praised the economic performance, stressing that although the government had revised its growth target from 4 percent to 3.6 percent, recent data showed that Turkey would reach its first target in the medium-economic outlook.
"I'd like to emphasize the manufacturing industry's important contribution to growth. When regarding 2023 goals, we need to grow more and provide sustainable growth," he said, speaking during the opening ceremony of 4th National Productivity Congress yesterday.
Exports of goods and services decreased by 2.2 percent and imports of goods and services increased by 6 percent at constant prices, TUİK data showed.
Deputy Prime Minister Ali Babacan said in a written statement that Turkey's exports, excluding gold exports, showed a hike in the third quarter, despite the country's biggest export market, the European Union, showing a weaker recovery than expectations.
"Goods exports, excluding gold exports, increased by 10.2 percent in the third quarter from the same period a year earlier. Exports, excluding gold, rose by 7 percent in the first nine months. The policy for market and product diversification played an important role in this," he said.
However, Seker Yatirim Chief Economist Gulay Elif Ergin said that despite growth being higher than expectations in the third quarter, the picture was still not positive. Ergin particularly referred to growth being reliant on domestic demand, the negative impact of exports, and possible further problems in global markets.
On the other hand, an economist at Tekstilbank, Aysegul Aykol Kocabas, said that even though stock production made up 2 points of the 4.4 percent figure, the 1 point contribution of private investment expenditures was promising.
Odeabank Economics Researches Manager İnanc Sozer said that while public expenditures had stopped increasing, the 5.3 percent growth of private sector investments was a positive sign of a rise in domestic savings and private sector investments, which had dropped in the previous six quarters. Sozer said they estimated that a growth rate above 3.6 percent and close to 4 percent would be achieved this year.