CEIC News@lert: Turkey Ranks Among the Top Performers in G20

Turkey’s real Gross Domestic Product (GDP) grew by 4% year-on-year (y-o-y) in seasonally and working-day adjusted terms in the second quarter of 2013, according to the latest release of the Turkish Statistical Institute. This makes Turkey the fourth fastest growing G20 member after China (7.5%), Argentina (7.1%), and Indonesia (5.8%). Furthermore, Turkey’s fast-paced economic development during the second quarter of 2013 places it ahead of the European Union, whose average GDP contracted by 0.2% in the same period. The G20, made up of 19 countries and the European Union (comprised of 28 members), accounts for around 90% of global GDP, 80% of global trade and two-thirds of the world population. The Turkish economy stands out in the G20 because it has recovered from negative growth rates in 2008-2009 and has managed to follow an expansionary path for the past 15 quarters since December 2009. This growth was at a faster-than-expected pace, thanks to soaring domestic demand, including heightened public expenditure growth. The economy recorded its fastest growth in the second quarter of this year on a year-on-year basis since the final quarter of 2011. GDP expanded by 4.4% in real and unadjusted terms, beating the International Monetary Fund’s (IMF’s) expectation of 3.8% for 2013, which was revised down amid a significant drop in capital inflows and depreciation of the local currency due to concerns that the US Federal Reserve would wind down (“taper”) its quantitative easing programme, i.e. abandon the pumping of liquidity into the markets. The second quarter figures are a good sign that the economy might meet the government’s annual target set in its medium-term programme presented at the beginning of October. While the growth target for 2013 has been reduced from 4% to 3.6%, the targets for inflation and unemployment have been increased. The challenge in the coming quarters is to sustain financial stability and balanced growth, fuelled by both domestic and foreign demands, while attracting foreign investment. Among G20 economies in the second quarter of 2013, China recorded the highest quarterly growth rate (7.5% y-o-y), while Italy saw the largest contraction (-2.1%). On the other hand, in Mexico seasonally-adjusted real GDP growth slowed to 0.3% from 2.6% in the previous quarter, and in Russia it decelerated to 1.2%, compared to 4.3% in the same quarter of the previous year. GDP growth rates have accelerated significantly in Argentina, Brazil and South Korea to 7.1%, 3.3% and 2.3% respectively. Compared with the same quarter of 2012, average GDP for the G20 members expanded by 2.3% in the second quarter of 2013, up from 1.9% in the previous quarter. Turkey has been through turbulent times during the past decade. The sharp economic slowdown in the years 2001 and 2009 caused by the global turmoil affected Turkey more severely than most other G20 members. Turkish GDP contracted by 5.6% during 2001 and by 4.7% in 2009 compared to the G20 average of -1.7%. According to the IMF’s unadjusted real GDP growth rate forecasts, growth in the G20 for 2013 will remain almost the same as that in 2012 at 2.3% y-o-y. However, despite the balanced growth in the G20, the IMF projects that Turkey’s growth rate will pick up, reaching 3.8% by the end of 2013 compared to 2.2% in 2012. Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
7th November 2013 CEIC News@lert: Turkey Ranks Among the Top Performers in G20