HIGH GROWTH SUPPORTED BY PRIVATE CONSUMPTION AND INVESTMENTS
Seyfettin Gürsel, Ozan Bakış and Uğurcan Acar
In the first quarter of 2018, according to seasonally and calendar day adjusted data, Gross Domestic Product (GDP) increased by 2 percent compared to the previous quarter and by 7.4 percent compared to the same quarter of last year. The highest contribution to annually economic growth comes from private consumption (6.6 percentage points) and investment (2.8 percentage points), respectively. Imports, after 20 percent of growth in the last quarter of 2017, reached again a very high growth rate, 15.6 percent. Contribution to growth of this high growth rate was minus 4.5 percentage points for imports. Since exports remained unchanged, contribution to growth of net foreign trade was minus 4.2 percentage points. The contribution of the stock change was relatively high with 1.7 percentage points.
Although GDP growth was higher than expectations in the first quarter, the rise in interest rates on the one hand, unexpected and high value losses in TL in the second quarter on the other hand are expected to restrain investments and to increase the uncertainties and inflation rate. Therefore, it is not surprising to see lower growth rates in the coming quarters. Nevertheless, it should be noted that 5.5 percent GDP growth projected in the 2018-2020 Medium Term Program (OVP) is still a realistic goal if extraordinary situations will not emerge after the election.