GDP growth in Turkey significantly higher than expected
2011-09-13 17:09:26
GDP growth in the second quarter of the year stood at 8.8% over last year, significantly higher than both the market consensus of 6.8% and our expectation of 5.8%. First quarter GDP growth is revised up to 11.6% from 11%, yielding a first half growth rate of 10.2%. Seasonally-adjusted growth over last quarter was also strong at 1.3%, on top of the 1.7% generated in the first quarter. In 4-quarter rolling terms, nominal GDP in the second quarter rose to USD 769bn from USD 731bn as of first quarter of the year.
Domestic demand was the main trigger again, with some 7pps contribution from consumption and 7pps from investment to GDP growth, while foreign demand shaved off some 5.2pps. Stock use was nil compared to 3.4pps contribution from stock build up for the same quarter of last year. The unbalanced growth based on increasing domestic demand and widening deteriorating foreign demand contribution seems to be slightly improving on lower domestic demand and flattening foreign demand contribution. Thanks to the base effect from last year and slowing imports, this picture is likely to have further improved by the third quarter of the year.
Though the figure came in significantly above expectations, we expect no additional measures from either the CBT or BRSA, amid significantly deteriorated sentiment regarding Turkey and global macro balances. Double-digit growth in the first half provided some relief from sudden stop concerns over economic activity, and yet we see no reason to revise our annual growth estimate up from 5%. This is because the main harm as a result of this current market volatility will be seen through the end of the year, the actual extent of which will become clearer as more data on the growth outlook emerges.