Turkey’s GDP grows 7.4% in third quarter, lira dampens nationwide prospects

Official data released on Tuesday revealed that Turkey’s economy increased 7.4% year on year in the third quarter, meeting forecasts due to the strength of retail demand, manufacturing, and exports. However, it did not alleviate concerns over policy setting.

According to figures from the Turkish Statistical Institute, on a seasonally and calendar-adjusted basis, GDP increased by 2.7 percent compared to the previous quarter.

The data was released against a backdrop of the lira’s 43 percent depreciation versus the dollar this year. By 1052 GMT, the lira had fallen 2.2 percent to 13.08.

Analysts have raised concerns about the lira’s influence on future growth, with Goldman Sachs raising its 2021 growth forecast to 10.5 percent from 9.5 percent and lowering its 2022 forecast to 3.5 percent.

Murat Unur from Goldman Sach said “We think that the GDP figures released today tell us little about the pace of economic activity going forward as the recent sell-off in the lira is likely to impact economic activity significantly.”