Turkey economy expands by stronger than expected rate
ISTANBUL - Turkey's economy expanded by a stronger than expected 4.4 percent on an annual comparison in the second quarter, statistics showed Tuesday.
Growth accelerated from a 2.9 percent rate in the first quarter, the national statistics agency said.
In calendar and seasonally adjusted terms, the economy grew by 2.1 percent from the previous quarter.
The data was welcome news as Turkey has been buffeted by the turmoil that has hit emerging markets in recent weeks as many investors pull out funds in anticipation of a withdrawal of US monetary stimulus.
The Turkish lira has repeatedly touched new lows against the dollar and stock prices have slumped, with tensions over a possible US strike against neighbouring Syria also hitting sentiment.
"This is undeniably an important success to have caught onto a growth trend despite all the global and regional difficulties," Finance Minister Mehmet Simsek was quoted as saying by Anatolia news agency.
Capital Economics said the second quarter growth figure solidly beat market expectations of 3.5 percent growth and its own expectations of 3.8 percent on an annual comparison.
While trade generated most of last year's meagre growth, the latest data shows the trend has reversed.
"Domestic demand was once again the main driver of growth, helped by accelerating consumer spending and a sharp rise in public consumption and investment," said William Jackson at Capitol Economics in an analyst note.
Despite the central bank's recent monetary tightening to protect the lira leading to slower growth, Capital Economics revised up its forecast for Turkey's annual growth this year from 3.0 to 3.8 percent.
Turkey's economic growth slowed to only 2.2 percent in 2012.
Despite the strong quarter annual growth is likely to come in under the government's medium-term target of 4.0 percent given slow global growth as well as financial market and geopolitical tensions, said Simsek.
Economy Minister Zafer Caglayan tipped 3.5 percent growth for 2013, according to Anatolia news agency.
Turkish stocks rose on the data release, with the BIST 100 index climbing 1.58 percent to 70,793.38 points in midday trading.