Turkey | Sharp GDP in 3Q signals “+” growth in 2020

Summary

Turkish economy grew by 6.7% yoy in 3Q20. The qoq growth rate was sharp at 15.6%, leading the overall level to jump over the pre-pandemic level. GDP growth rate reached 0.5% yoy in the first 3 quarters of 2020. On top of the robust performance, 2020 GDP growth will likely get near 1% (above our current forecasts of 0%).

Key points

• Key points:
• Domestic demand gave a robust contribution of 15.8pp (where inventories remained supportive with +5.1pp contribution), while net exports dragged down a record of 9.1pp from the yearly GDP growth rate.
• Services sector, even the ones sensitive to the Covid shock, gave a positive contribution; while other main subsectors also showed a strong rebound.
• Our monthly GDP indicator nowcasts a yearly GDP growth rate relatively stable to 3Q20, which we expect to lose momentum in the very short term.
• On top of the robust performance so far, 2020 GDP growth will likely get near 1%, above our current forecast of 0%.
• Given the strong momentum, the changes in the policy framework, the reduction in risk premium and strong base effect we maintain our 5.5% GDP forecasts for 2021.

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