Türkiye’s economy expanded 3.8% year-over-year in the second quarter of 2023, better than the market forecast, according to data released by the country’s statistical authority on Thursday.
The country’s gross domestic product (GDP) at current prices surged 60.7% from last year to TL 5.5 trillion ($271.5 billion) in the April-June period, the Turkish Statistical Institute (TurkStat) said.
Economists had expected Türkiye’s economy would grow 3.5% on an annual basis in the second quarter.
The figure followed a downwardly revised 3.9% annual growth in the first quarter of 2023.
Every quarter, the Turkish economy grew 3.5% in the three months to June, shifting from a 0.1% contraction in the previous period.
The median estimate in a Reuters poll of 12 economists predicted a GDP growth of around 3.5% for the April-June period, while a survey by private broadcaster Bloomberg HT and Anadolu Agency (AA) forecasted the expansion at 4% and 3.3%, respectively.
Commenting on the larger-than-expected growth recorded in 2023's second quarter, Treasury and Finance Minister Mehmet Şimşek said, "Our economy continued its strong growth performance in the second quarter of the year when we tried to compensate for the economic effects of the earthquake disaster."
"Our goal is strong growth along with balance, sustainability and inclusivity," Şimşek highlighted.
The government aims to strengthen the economy against external shocks by prioritizing the transfer of resources to investment, employment, production and exports rather than consumption, he added.
"We began to see the positive effects of the policies we implemented. We will continue to take the necessary steps to ensure stability and permanence of these effects."
Curbing price increases has been the top priority for the government, in line with the shift in economic policies following parliamentary and presidential elections in May.
On Monday, Türkiye’s central bank said it was continuing to implement a road map toward setting the ground to ensure the sustainable start of disinflation in 2024 by taking "gradual and decisive" steps.
Second quarter growth
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% year-over-year in April-June.
The figures increased by 6.2% in the construction sector and 1.2% in agriculture but decreased by 2.6% in industry during the same period.
Türkiye’s economic activity in the first quarter was impacted by the devastating earthquakes that hit the country’s south and southeast, killing more than 50,000.
According to the officials’ estimates, the reconstruction efforts are expected to cost more than $100 billion.
Goldman Sachs said growth in the second quarter accelerated mainly due to preelection fiscal stimulus and the recovery after the earthquakes. It said household consumption remained strong, while growth in industrial production and exports weakened in that period.
Imports of goods and services soared 20.3% in the three months compared to last year, while exports of goods and services plunged 9%.
TurkStat on Thursday also said that Türkiye’s annual GDP growth rate for 2022 was revised slightly downwards to 5.5%.
Türkiye’s economy bounced back strongly from the COVID-19 pandemic, extending its hot streak on strong domestic demand and exports, continuing the upward trend in growth in 2022 despite a slowdown in the main trading partners, which impacted exports because of the Russia-Ukraine war in the second half of the year.
The economy continued its growth in the first quarter of 2023 despite challenging global financial conditions and the impact of earthquakes in the agriculturally significant southeastern region of the country.