NET FOREIGN TRADE DRIVED GROWTH
Ozan Bakış, Uğurcan Acar
The Turkish economy has grown 7.4 percent in the third quarter of 2021. Given the 6.7 percent growth rate in the same quarter of 2020, there is no base effect in this quarter in contrast to the second quarter. The economy shrank by 10 percent in the second quarter of 2020, and in return it grew 21 percent in the second quarter of this year thanks to the base effect. The biggest contribution to the growth has come from net foreign trade in this quarter. Exports which increase by 25.6 percent contribute 6.6 percentage points to the growth. Imports which decrease by 8.3 percent contribute 2.7 percentage points to the growth, and as a result overall 9.3 percentage points of the growth comes from net foreign trade in this quarter. Using seasonally and calendar adjusted data, we see that the GDP grows by 2.7 percent compared to the previous quarter by means of consumption. One can conclude that the contribution of net foreign trade to the growth will be stronger given that bulk of the depreciation of Turkish lira occurred in October and the exchange rate was relatively stable during the second quarter. However, the risk caused by distorted expectations due to the increasing inflation and interest rate may drag down growth rate in the following quarters.