NEWS ECONOMY NEWS        29/05/2020

Turkey’s economy recorded a growth of 4.5% in the first quarter of 2020

According to figures prepared by the Turkish Statistical Institute (TÜİK – TurkStat), Turkey’s gross domestic product (GDP) grew by 4.5% in the first quarter of 2020 compared with the same period of the previous year. The first quarter’s gross domestic product (GDP) for 2020 using the production calculation method at current prices was reported as TL 1,071 billion (USD 176.1 billion), which is a 16.2% increase on the TL 922 billion (USD 171.7 billion) figure for the same period of the previous year.


The 4.5% growth was presented by the Turkish government as a success, and indeed at first glance this would seem to have been the case when one takes into consideration the on-going economic recession and the spread of the coronavirus to Turkey in mid-March. However, it should be taken into account that the comparative figure used for the first quarter of 2019 was itself a contraction of 2.3% on the first quarter of the previous year. The growth figure presented was below the predictions of economic analysts which ranged from 4.9% to 5.4%.


The growth in the first quarter, which was driven by government spending and household consumption, which rose 6.2% and 5.1% respectively compared with the same period of the previous year, was boosted with a surge in consumption that occurred in March just before a lockdown to stem the spread of the coronavirus pandemic was put in place. Gross fixed capital formation and exports of goods and services however fell 1.4% and 1% respectively year-on-year, whereas imports of goods and services increased 22.1%.


On a sectoral basis, the highest growth was recorded in other services with 12.1%, followed by information and communication with a growth of 10.7% and industry with a growth of 6.2%. The agricultural sector showed an increase of 3%, whereas the construction sector performed badly yet again with a contraction of 1.5%.


The overall growth rate for the year 2019 was 0.9% with the quarterly growth rates being (2.3%) for the first quarter, (1.6%) for the second quarter, 1% for the third quarter, 6% for the fourth quarter. The GDP for 2019 was given as TL 4,280,381 million (USD 753,693 million), a 14.9% increase on the previous year using current prices. GDP income per head of population was given as TL 51,834 (USD 9,127), compared with TL 45,750 (USD 9,693) in 2018.


The coronavirus pandemic will cause a significant slowdown in economic activity in Turkey  in the second quarter of 2020. Though the Turkish government has encouraged manufacturing to continue, the lockdown of the population has drastically reduced domestic consumption. There will also be extreme fiscal pressure on the government as a result of falling tax income and the need to provide financial support to the population and companies deprived of income. Turkey’s locomotive industry and Turkey’s biggest exporter, the automotive industry, has been shut down for two months and the tourism industry, a very important source of foreign currency, is unlikely to operate fully this season.  


The Turkish economy was expected to grow 5% in 2020 before the onset of the outbreak, as laid out in the country's new economic program announced last September. However, it is now unlikely that the economy will be able to record a growth this year, with many international financial institutions forecasting a contraction of the economy.

Turkey’s net minimum wage has been raised 49% to TL 17,002 (USD 577) as of 01.01.2024       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s official annual inflation rate increases to 75.45% in May 2024       Turkey’s official unemployment rate is 8.6% in March 2024       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 85,372,377 as of 2023 yearend       No. of foreigners visiting Turkey in 2023 increases 10.4% to 49.2 million       Turkey’s private sector foreign debt is USD 164.1 billion as of yearend 2023       Turkey’s economy grew 4.5% in 2023       FDI to Turkey is USD 10.6 billion in 2023       Turkey’s current account deficit is USD 45 billion in 2023