Turkey: Growth in 2Q surprised market on the upside

Summary

Turkish Economy contracted by 1.5% in annual terms in 2Q19, better than market expectation but worse than ours (-2% Consensus vs. -1% BBVA Research). In quarterly terms, the economy grew at 1.2%, avoiding the “W” pattern but moderating from 1.6% QoQ in 1Q19. We still maintain our GDP growth forecast at 0.3% for 2019.

Key points

• Key points:
• The second quarter GDP growth was better than market expectation. ( -1.5% yoy actual vs -2.0% yoy market expectation)
• The economic activity grew by 1.2% qoq in 2Q19, avoiding the "W" pattern.
• The recent macro prudential measure of CBRT, the better financial conditions and the supportive base effects in the second half of the year, would lead to a positive growth rate in 2019 GDP.

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