Turkish economy shows signs of slowdown in Q2 2018

September 9, 2018 8:07 amComments Off on Turkish economy shows signs of slowdown in Q2 2018Views: 60

Turkish economyTurkish economy shows signs of slowdown in Q2 2018, which some investors believe will turn into a technical recession later this year. The Turkish economy has grown by 5.2% on an annual basis in the second quarter, according to official data. Despite solid growth, however, the new data suggest a slowdown in growth, because in the first quarter of this year the Turkish economy reported expansion of 7.4%.

And although Turkey is one of the world’s fastest growing countries, a deeper look at the data shows that consumers and investors are beginning to shrink their spending, while government spending and exporters are preventing a faster slowdown.

This is expected to be the latest data for solid growth before the expected slowdown, as Turkey faces a currency crisis.

The main drivers of growth in the second quarter were the industry and the construction sector, which grew by 4.3% and 0.8% respectively.

The private consumption, which is expected to generate nearly two-thirds of the economy, grew by 6.3% yoy in the second three months of the year, slowing down from the revised 9.3% in the first quarter. The government spending grew by 7.2% after the revised 4.9% in the previous quarter. The investment costs increased by 3.9% compared to the revised 7.9%, while machinery and equipment costs increased by 0.6%.

The expansion of the service sector is mainly due to banks and insurance companies whose economic activity increased by 12.1%, compared to a 3% growth in the previous quarter.

President Recep Tayyip Erdogan has witnessed strong growth during his 15-year rule, but now the economy is facing challenges after the dramatic depreciation of the pound, triggered in part by concern, has fueled its impact on monetary policy.

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