Goodbye recession: Turkey's economic growth back on track
Turkey's economy has shaken off recession to grow 0.9% in the three months to September.
The growth follows three consecutive quarters of contraction after last year's currency crisis, when the Turkish lira plunged.
Turkey's always maintained a steady 5% growth, but a 30% drop in the lira pushed up inflation and interest rates, slowing consumer activity. In response, Turkey's central bank cut borrowing costs to help revive spending.
The new data, released this week, chimes with a Reuters News Agency poll tipping 1% year-on-year expansion in the third quarter of 2019. Reuters also predicted that Turkey's economy will grow 0.5% this year, in line with the government forecast.
Turkish finance minister Berat Albayrak said that indicators for the fourth quarter show that momentum is increasing, and growth should be back to 5% in 2020.
However, other quarters remain cautious in the face of a lack of confidence in households and businesses. The government will need to make economic reforms that will restore confidence in the long term.
A closer look at growth
Third-quarter growth was driven by Turkey's agricultural sector, which expanded 3.8%. Industry and services grew by 1.6% and 0.6% respectively. However, the construction sector shrank by 7.8%, TurkStat figures show.
Gross domestic product also expanded in the same period, the third positive quarterly result in a row. Exports increased by 5.1% year on year, while imports grew by 7.6%.
Along with economic recovery, inflation has dropped to single digits, thanks to the central bank slashing rates from 24 to 12%.
QNB Finansbank said indicators pointed to a recovery in economic activity in the fourth quarter, heralding, officials hope, to the sought-after 5% growth next year.