Q3 GDP:''The growth that lasts''

Turkish Economy: Q3 GDP

The growth that lasts

Gross domestic product increased by 1,2% QoQ (seasonally and working day adjusted) a little slower than the market expectation of 1,8%. In YoY terms growth rate has reached double digits with 11,1% (Figure 1) – significantly higher compared to market expectations of 8,5%. Private consumption and investments were the main drivers with 1,1% and 1,4% contributions while stocks added another 0,2%. On the other hand net exports and public spending slashed off -1,3% and -0,2%, respectively.

Key Take-aways:

  • 2017 GDP expected in the range of 6,5% to 7,0%.
  • Strong economic activity to keep pace in coming quarters on the back of strong job gains and investments.
  • Over 1 million jobs added in the first eight months.
  • Our long held view that high rates of capacity utilization will convert into investments holding up well. Machinery investments increased 15,3% YoY after four quarters of negative contribution.
  • Once investments start they carry economic activity into future quarters. Strong level of investments will help Turkey preserving her 5+% growth trajectory next year.