Official data showed on Friday that the Turkish economy grew by 5.7% in the first quarter of the year thanks to domestic demand, in line with expectations.
A Reuters poll expected Turkey’s economy to grow by 5.7% in the first quarter and by 3.15% during the entire current year.
Growth is expected to slow during the remainder of the year as a result of the repercussions of the monetary tightening policy pursued by the Turkish Central Bank in the face of rising inflation.
The central bank raised interest rates by a total of 4,150 basis points as part of a monetary tightening cycle that began last June.
The interest rate increased to 50% last March, indicating deteriorating inflation expectations.
The bank has kept interest rates unchanged since then, but pledged to act if inflation expectations worsen.
“Our economy is moving towards more balance and sustainable growth with rational policies,” Treasury and Finance Minister Mehmet Simsek said.
Şimşek stated in a statement today, Friday, that:
- The annual national income reached one trillion and 158 billion dollars, commenting on the growth data for the first quarter of this year announced by the Turkish Statistics Authority.
- Exports of goods and services grew by 4%.
- Industrial value added increased by 4.9%.
- High-tech production registered a growth of 21% in this period, which is encouraging for increased value added.
- One million and 46 thousand additional job opportunities were created in the first quarter compared to the same period of the previous year.
- The seasonally adjusted unemployment rate fell to 8.7%, the lowest level in the last 44 quarters.
The minister said, “We expect growth in the second half with more supportive external conditions and moderate domestic demand, and with a positive contribution from net external demand this year.”
He added, “Thanks to our program, we have balanced growth, a decrease in the current account deficit, increased confidence, improved expectations, and a rapid entry of external financing, and all of this contributes to a decrease in inflation.”
