SHARP DROP IN DOMESTIC DEMAND, MELTDOWN IN STOCKS, BOOM IN NET EXPORTS, SLIGHT RECESSION IN GDP IN THE 3RD QUARTER
Seyfettin Gürsel, Ozan Bakış and Furkan Kavuncu
In the third quarter of 2018, according to seasonally and calendar day adjusted data, Gross Domestic Product (GDP) decreased by 1.1 percent compared to the previous quarter, yet increased by 1.6 percent compared to the same quarter of last year. The greatest negative impact on the annually economic growth comes from the change in stocks, for which the contribution to GDP growth was minus 7 percentage points. Imports which stayed almost constant in the second quarter, compared to the same quarter of the previous year, decreased by 16.7 percent in the third quarter of 2018. As another result of the exchange rate, increase in exports jumped from 4.2 percent to 13.6 percent. Therefore, the contribution to growth of net foreign trade which turned positive with 1.3 percentage points in the second quarter of 2018, went up to 8.1 percentage points in the third quarter.
Since the growth rates for first three quarters of 2018 are 7.4 percent, 5.3 percent and 1.6 percent, respectively, the growth rate for the last quarter have to be around zero in order to achieve the target of 3.8 percent GDP growth projected in the 2018-2020 New Economy Program (NEP). Taking into account the current indicators, while reaching this target still seems possible, in case of a negative growth in the fourth quarter of the year the economy is likely to miss it.