Türkiye's economy beats market forecast to grow 3.8% in 2nd quarter

Türkiye's economy has grown 3.8 percent year-on-year in the second quarter of 2023, better than the market forecast, according to data released by the country's statistical authority.

The country's gross domestic product at current prices surged 60.7 percent from last year to $271.5 billion (5.5 trillion Turkish liras) in the April-June period, the Turkish Statistical Institute (TurkStat) said.

"We started to see the positive effects of the policies we implemented. We will continue to take the necessary steps to ensure the lasting effects of these impacts and to maintain stability" Türkiye's Treasury and Finance Minister Mehmet Simsek said.

Economists had expected that Türkiye's economy would grow 3.5 percent on an annual basis in the second quarter. The figure followed a downwardly revised 3.9 percent annual growth in the first quarter of 2023.

On a quarterly basis, the Turkish economy grew 3.5 percent in the three months to June, shifting from a 0.1 percent contraction in the previous period.

Second-strongest growth in OECD

Value added increased the most among the services – wholesale and retail trade, transport, storage, accommodation, and food service activities – constituting a gross domestic product of 6.4 percent year-on-year in April-June.

The figures increased by 6.2 percent in the construction sector and 1.2 percent in agriculture, but decreased by 2.6 percent in industry during the same period.

Imports of goods and services soared 20.3 percent in the three-month period compared to last year, while exports of goods and services plunged 9 percent.

The final consumption expenditures of resident households hiked 15.6 percent in the second quarter of 2023.

Government final consumption expenditure grew by 5.3 percent in the same period.

TurkStat also said that Türkiye's annual GDP growth rate for 2022 was revised slightly downwards to 5.5 percent.

Türkiye boasted the second-strongest growth rate among Organisation for Economic Cooperation and Development (OECD) countries, for which data are available, in the second quarter of this year.

Among G-20 countries for which data is available, China saw the highest annual growth in the second quarter with 6.3 percent, followed by Indonesia (4.9 percent), Türkiye, and Mexico.