High Growth in the Fourth Quarter
Ozan Bakış, Uğurcan Acar
In the light of fully-released October, November, and December leading indicators, we expect GDP to expand by 6.6 percent on a year-on-year basis for the last quarter of 2021. According to seasonal and calendar adjusted data, we forecast quarter-on-quarter GDP growth to be 1.7 percent.
There are three sources of economic growth in the last quarter: the increase in demand for services on an annual basis, positive balance of foreign trade, and industrial production. IMF has recently raised its growth forecast for Turkey for 2021 from 5.8 percent to 9 percent. If the growth rate in the fourth quarter is close to our projections, then the 2021 growth will be over 10 percent. However, we note that increased public expenditures despite falling tax revenues bring about the budget deficit and high inflation risk.