Solid domestic demand and consumption are estimated to have helped Türkiye’s economy register a growth of up to 5.6% in the third quarter of the year, according to surveys.
The gross domestic product (GDP) likely expanded between 4.6% and 6.4% in July-September, according to a median forecast in the Reuters poll of 17 institutions.
A poll of 18 institutions by private broadcaster Bloomberg HT estimates a growth between 4.1% and 6.1%, with a median of 5.5%. Economists in an Anadolu Agency (AA) survey see the expansion at 5.19%, with forecasts ranging between 4.1% and 6%.
“We observe from the retail volume index that although there is a weakening compared to the previous quarter, domestic demand is still very strong in the third quarter. The working day effect also contributes to GDP growth during this period,” said Serkan Gönençler, chief economist at Gedik Yatırım.
“In the last quarter, we expect GDP growth to decline to around 2.5 to 3% with the slowdown in domestic demand becoming more marked.”
The economy grew 3.8% in the second quarter as Türkiye’s central bank implemented long-running low rates, prioritizing growth, exports, and investment before the May elections.
After the vote, President Recep Tayyip Erdoğan appointed a new administration, led by respected veteran policymaker Mehmet Şimşek as treasury and finance minister and former Wall Street banker Hafize Gaye Erkan as CBRT governor.
The administration reversed a yearslong easing cycle and delivered aggressive interest rate hikes in a bid to tackle the country’s long-term inflation issue.
Since June, however, the bank has hiked its policy rate to 40% from 8.5%, including hikes of 500 basis points in each of the last three months.
Economists expected a sharply tighter monetary policy after the election would lead to an economic slowdown through year’s end.
“With monetary policy tightness maintained throughout most of 2024, annual GDP growth may decline to around 1.5% in 2024,” said Gönençler.
The median estimate of 10 economists in the Reuters poll for growth in 2023 stood at 4.2%, with forecasts between 4% and 4.5%. The poll by Bloomberg HT estimates the same growth, with forecasts ranging between 3.9% and 4.5%.
The median estimate for 2023 growth in the AA survey stands at 4.3%, with expectations varying from 4% to 4.5%.
The economy bounced back strongly from the COVID-19 pandemic and grew 5.6% in 2022 on strong domestic demand and exports. That was despite a slowdown in growth for its main trading partners due to the Russia-Ukraine war, which hurt exports in the second half of that year.
The Turkish Statistical Institute (TurkStat) will release the third-quarter growth data on Thursday.