SHARP SLOWDOWN IN THE THIRD QUARTER
Seyfettin Gürsel, Mine Durmaz and Melike Kökkızıl
According to Turkstat seasonally and calendar adjusted gross domestic product increased by 1.3 percent in the second quarter of 2015. Considering mostly unfavorable leading indicators of July, we forecast 0.1 percent economic growth in the third quarter comparing to second quarter. Industrial Production Index (IPI) declined by 1.5 percent from the previous month. Export volume index decreased by 0.3 percent, and the import volume index increased by 2.2 percent. We calculate the corresponding year on year growth as 3.9 percent given cumulative high growth rates during the last three quarters.
The current account deficit in July was $3.2 billion. 12-month rolling current account deficit increased from 44.2 billion to $45.0 billion. We expect the current account deficit to GDP ratio to rise from 5.7 percent in the second quarter to 6.1 percent in the third quarter, and the gold-excluded current account deficit to be 6.1 percent.