Turkey’s Economy Grew 4.0 Percent In The Third Quarter of 2015
The announcement came as Prime Minister Ahmet Davutoğlu, fresh from his ruling party’s victory in snap November 1 elections, announced an action plan for reforms to help boost long term growth.
The better than expected third quarter figures mean that the economy grew 3.4 percent in the first nine months of 2015, the statistics office said in a statement.
In all of 2014, the growth rate was 2.9 percent.
Adjusted for seasonal and calendar factors, gross domestic product (GDP) grew 5.4 percent in the third quarter from the same period the year earlier and 1.3 percent from the second quarter 2015, it added.
The headline growth figure was “staggering”, said William Jackson at London-based Capital Economics in a note to clients, adding it was the fastest annual growth rate since the second quarter of 2011.
He said the figure means that full year GDP growth for 2015 would likely be to “stronger than we had previously anticipated”, predicting a figure closer to 3.5 percent than 3.0.
The strong reading will also reduce the political pressure on the nominally independent central bank from President Recep Tayyip Erdoğan for a rate cut to boost growth, he added.
With inflation coming in at a high 8.1 percent in November, the data “reinforces our view” the bank will begin to raise interest rates at its next meeting on December 22, he added
Turkey now faces Russian sanctions following its shooting down of a Russian war plane on the Syrian border last month. Bur economists have said the overall effects on growth should be limited if their only major target is the tourist industry.
The ruling Justice and Development Party (AKP) is hoping its regaining of an overall majority in the snap November polls will usher in a new era of stability where it can build on its 13-year hold on power in Turkey with new reforms.
In a speech aimed at fulfilling manifesto promises, Davutoglu said the minimum wage in Turkey would be increased 30 percent to 1,300 Turkish lira ($447) a month, a key move to regularise the labour market.
He vowed new tax reforms, measures to improve the business climate, help small and medium-sized enterprises and changes to the pension system.
“Growth in the third quarter was better than forecast, despite the growing geopolitical instability in neighbouring countries. God willing, 2016 will be an even better year,” Davutoğlu quotes.