Turkey’s economy grew at 2.5% in the second quarter of 2024, marking a decline from the first quarter due to the Central Bank’s measures to curb inflation; however, they still managed to keep Turkey’s GDP growing, even above economists’ forecasts.
Data released on Monday by the Turkish Statistical Institute (TÜİK) show that the Eurasian country’s economy cooled from the 5.3% growth it achieved in the first three months of 2024; this follows more than a year of tightening credit conditions by the Turkish Central Bank, which in the past year has raised the benchmark interest rate from 8.5% to 50% to combat inflation, which after reaching a record 75% in May fell to 62% last July.
Even so, the second quarter GDP figure has remained positive, surprising leading analysts with a growth between April and June of 2.5%. Growth was 6.5% in the construction sector, 3.7% in real estate activities and in agriculture, fishing and forestry activities, and 3.4% in information and communication services.
Exports, which had grown at 4.3% in the first quarter, remained unchanged during the second quarter of the year, while the year-on-year decline in imports increased from 3% to 5.7% between April and June. Domestic household consumption, on the other hand, managed to increase by 1.6% in the second quarter compared to the same period of the previous year, albeit down markedly from the 6.8% recorded in the first quarter.
Commenting on the new data on the development of the Turkish economy, Treasury and Finance Minister Mehmet Şimşek stressed that the main economic indicators confirm that growth is stabilising. ‘The current account deficit has been reduced, the risk premium has decreased, while forex flows have accelerated, reserves have improved and we have entered a process of disinflation,’ said Şimşek via his profile on the social network X, adding that while the contribution of domestic demand to growth decreased by 1.2%, the contribution of net foreign demand increased by 1.3%.
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Edited and reviewed by:
Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
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