Turkish economy grew 4 pct in 2015, beating estimates, data shows

ANKARA/ISTANBUL

The Turkish economy grew a stronger-than-expected 4 percent in 2015, with robust growth at 5.7 percent in the last quarter, mainly due to a rise in consumption and public spending, according to official data released on March 31. 

The GDP per capita however decreased from $10,395 in 2014 to $9,261 in 2015 due to the loss in the Turkish Lira’s value, while this figure increased from 22,732 liras in 2014 to 25,130 liras in 2015 at current prices on the lira basis. 

Deputy Prime Minister Mehmet Şimşek said the 2015 growth was in line with the government’s medium-term program and made it the fourth fastest-growing economy among G-20 countries.

Domestic demand contributed 4.3 percentage points to growth and net foreign demand made a negative 0.3-point contribution, he said, in a statement.

The largest contribution to the 4 percent GDP growth in 2015 came from household expenditures with around 3 percent. The contribution of public spending was 0.76 points, the data showed.  


Syrian refugees’ impact on domestic consumption

The public sector’s construction and infrastructure spending played a crucial role in GDP growth, according to the data. 

“We also believe that the rising number of Syrian refugees also made a positive contribution to boosting consumption,” said BGC Partners Chief Economist Özgür Altuğ, as quoted by Reuters. 

“The figures have confirmed the Turkish economy’s resilience against shocks. We expect growth will be around 3 percent this year, below the government’s estimate at 4.5 percent,” he added. 

Şimşek has vowed structural reforms to achieve robust and sustainable growth.

“This success was achieved despite last year’s two general elections, increasing geopolitical tensions in our region, problems in our trade partners and global market volatilities,” he said. 

Robust domestic demand provided cheer for the Turkish economy, which has recently been weighed down by political and security concerns, according to analysts. 

The economic outlook has been clouded by security concerns after multiple bomb attacks hit the country’s two largest cities, Istanbul and Ankara. Tensions with Russia have also hit trade and tourism since Russia imposed a raft of sanctions against Turkey in many economic and trade fields.