Türkiye | GDP grew by 7.5% in 1H22

Summary

Turkish economy grew by 7.6% y/y in 2Q22, resulted in 7.5% y/y GDP growth in the first half of 2022. We keep our 2022 GDP growth forecast of 5%, on the grounds of the recent high realization in the first half and authorities’ bias to maintain loose policies.

Key points

• Key points:
• Strong private consumption and exports remained to be the main drivers on the yearly growth rate whereas investment demand stayed sluggish.
• Main contributors to GDP growth were services and industry since the contribution of services in general terms increased further to 6.7pp, mainly backed by trade, transportation and accommodation (4.2pp) and financial activities (1.3pp), which was followed by industry (1.7pp).
• Stocks continued to decline in the last 7 quarters, reaching the historically highest negative contribution to GDP in 2Q22 as demand remained stronger than supply.
• Based on high frequency indicators and our big data information, GDP growth has started to slow-down significantly to slightly below 0% q/q, which corresponds to near 3.4% y/y growth as of August (%27 of information).
• Expansionary bias of the government could balance the downside risk on growth in the coming period due to tighter external financial conditions and negative impact of regional conflict with Russia on economic activity in EU.

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