Turkey | The economy grew by 21.7% in 2Q21

Summary

Turkish economy grew by 21.7% yearly in 2Q21, resulting in a 14.3% growth in the 1H21. The high carry-over impact is over 3Q onwards but the reopening, recovering tourism and exports revenues are still boosting the overall growth rate. We maintain our 2021 GDP growth forecast at 9%, with risks still on the upside.

Key points

• Key points:
• Quarterly growth rate moderated to 0.9% (prev:2.2% in 1Q), stemming from all sectors except for services sector.
• Domestic demand was solid on the contributions of consumption and investment (13.7pp and 5.4pp, respectively) where net exports' contribution (which turned into positive last quarter), started to weigh on the upside.
• All sectors except for financial and insurance activities (-1.7pp) gave positive contributions where trade, transportation, accommodation sectors took the lead with 8.9pp, which was followed by industry (7.5pp).
• Looking ahead, we expect domestic demand to moderate in the rest of the year, as confirmed by our Big Data indicators but external demand will likely support activity and help the rebalancing in the economy.

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