Turkey 3Q GDP Grew 7.4% on Year
By Nihad Ahmed
Turkey's economy grew 7.4% on year in the third quarter, the
Turkish statistics office Turkstat said Tuesday, but a sharp slide
in the lira on persistently high inflation concerns has now put the
country into a currency crisis.
Growth in the quarter was supported by private consumption, up
9.1% on year, Turkstat data showed, propelled by the lifting of
most Covid-19 restrictions in July. Government consumption rose
9.6%, while gross fixed capital formation fell 2.4%.
Net exports also drove growth, underpinned by a strong export
performance. Exports of goods and service were up 25.6%, with
external demand driving increased tourist inflows and shipments of
goods, while imports fell 8.3%.
The statistics office revised second-quarter gross domestic
product growth up to 22.0% from 21.7%. The economy grew at a record
pace in the quarter on the back of a rebound in activity and large
base effects, and was the only other G-20 member aside from China
to log growth in 2020, shored up by cheap credit.
The loosening of monetary conditions at the behest of President
Recep Tayyip Erdogan has paved the way for runaway inflation and
thrown the lira into a frenzy, eroding households' purchasing power
and making vital imports, including energy and raw materials, much
Mr. Erdogan has pressured the central bank to cut interest rates
despite rising inflation, which reached almost 20% in October. His
defense of further rate cuts last week dashed hopes for a change in
course, sending the lira to a historic low.
A vicious cycle of sky-high inflation, further falls in the lira
and increased dollarization could severely damp future growth,
Write to Nihad Ahmed at email@example.com
(END) Dow Jones Newswires
November 30, 2021 02:40 ET (07:40 GMT)
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