Turkey’s annual GDP rises 6.6 pct in Q1
Posted by meb at June 30th, 2008
Turkey’s gross domestic product (GDP) grew 6.6 percent year-on-year in the first quarter, the Turkish Statistics Institute said on Monday. It exceeded expectations, which were around 5 percent.
The main driver of strong growth in the first quarter is the support of net exports, whose contribution returned to positive territory after two quarters.
The strongest growth came out in manufacturing with 7 percent, with 9.9 percent in trade and 7.7 percent in transport, despite a slowdown in construction with 2.8 percent.
From the production side, agricultural output grew by 5.6 percent in the first quarter after contracting through 2007. On the expenditures side, buoyant domestic demand is the main driver. Both private consumption and investment expenditures were strong in the first quarter; contributions of these categories to annual GDP growth were at 5.3 and 2.4 percentage points respectively.
However, the growth is expected to moderate in the coming quarters due to the delayed effects of monetary tightening as well increase in the perceived political uncertainty.
Turkey’s Finansbank said it continues to stick to its forecast following the surprisingly strong first quarter data. “We stick to our above-consensus forecast for full year growth at 4.4 percent,” Finanbank said in a note emailed to clients on Monday.
“We expect growth rates to decelerate in the coming quarters as combined adverse impacts of tighter monetary policy and political uncertainty weigh on domestic demand,” Finansbank added.
Turkey’s industrialists have assessed the growth rate as not sufficient and said it could not be rated as “a magic growth rate”, ANKA agency reported on Monday
Ankara Clothing and Manufacturer’s Association Chairman Canip Karakus said, “When 7 percent growth in the production sector is recorded compared with last year’s 10.2 percent growth for the same term, it can be said this growth points to premature growth.”
“If Turkey fails to achieve an 8 percent annual growth rate, it can not solve its social and economic problems. The government needs to be more careful in input costs so as to overcome the growth issue in the economy,” Karakus added.
The Turkish government had set a growth target of 5.5 percent for 2008, although government officials have since revised its estimates to around 4.5 percent.
In the fourth quarter of 2007 the economy grew 3.4 percent, for a full-year rate of 4.5 percent.
source: Hurriyet daily
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