he Turkish economy grew 3.2 percent in the first quarter, marking an expected slowdown after spectacular expansion in the previous year, official data revealed yesterday. The growth was backed by external demand, while slowing domestic demand confirmed the economy is in a balancing process that will result in a soft landing.
Output expanded by 3.2 percent in the first three months of 2012, pointing to a halving of the growth rate, data from the Turkish Statistics Institute (TÜİK) showed.
Calendar-adjusted gross domestic product in the first quarter increased by 2.3 percent compared to the same quarter of the previous year, while seasonal and calendar-adjusted GDP increased by 0.2 percent compared to the previous quarter.
“3.2 percent is a pretty good rate when you think about the financial crisis the European Union, our biggest trade partner, is caught up in,” Turkish Finance Minister Mehmet Şimşek told the Anatolia news agency.
The growth rate is “faster than both our forecast at 2.5 percent and the market consensus at 2.8 percent,” Turkey’s Finansbank said in a newsletter, according to Agence France-Presse. The bank, however, added that the surprising growth did not pull up their annual growth forecast for 2012, which is at about 2.9 percent –lower than the government forecast of 4 percent. Turkey expanded by 8.5 percent in 2011, 8.9 percent in 2010.
But its expansion had already started slowing down by the last quarter of 2011, with a growth rate of 5.2 percent – considered a healthy slowdown by Ankara as its economy gears up for a “soft landing.”
Şimşek said the slowdown was not a surprise but an “expected trend” due to the challenges posed by the eurozone crisis.
The energy industry recorded the highest growth at 8.4 percent. The mining and quarrying industry, which grew 10.8 percent in the first quarter of last year, was the only industry to register a contraction in the first quarter, shrinking 0.6 percent. The construction sector grew by a mere 2.8 percent after brilliant growth of 15.3 percent in 2011.
“The first-quarter growth stemmed from exports,” said Şimşek, adding that private consumption, which constitutes almost 70 percent of the economy, made no contribution to growth, while net exports made about 4.5 points of contribution.
“We can still say that 4 percent [the official growth target for this year] is reasonable, provided the European crisis does not deepen,” he said.
The growth was mainly based on exports and public spending. Exports to the Middle East and Africa have made a significant contribution to exports-oriented growth, said Gülay Elif Girgin, an economist at Oyak Investment.
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