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Hard data realizations so far confirm the slowdown in activity in 2Q25 while domestic demand conditions continue to moderate. We maintain our 2025 GDP growth forecast of 3.5% despite the downside risks, assuming an effective policy mix targeting a smooth adjustment.

We develop big data-based, high-frequency sectoral indicators using bank transaction data to nowcast real-time sectoral GDP growth, enhancing accuracy through modeling techniques and strong alignment with official statistics.

The economy slowed down more than expected in 1Q22 (to 0.3% q/q), mainly due to the weakness of private consumption. However, there are some positive elements in the composition of demand, as growth was supported by a higher-than-expected advance in investment and exports.

The economy slowed in 4Q21 (2.0% q/q), but the composition of demand was virtuous. In particular, growth was supported by investment and trade flows. Thus, 2021 closed with an annual increase of 5%, which confirms BBVA Research forecasts and places activity at 4pp of the pre-crisis peak.

Industrial Production (IP) increased by 8.5% yoy in calendar adjusted term(5.4% yoy in raw series), in line with the market expectation in October. 2021 GDP growth will likely reach 10.5-11%, beating our current 9.5% GDP growth forecast.

As expected, the economy resumed a strong recovery following the easing of the mobility restrictions linked to the state of emergency. Domestic demand added, thanks to consumption, while total investment and external demand subtracted. Hours worked grew more than activity

Industrial Production (IP) in April contracted by 31.4% yoy as the restrictions and the impact of the COVID on the activity intensified during the month. We maintain our GDP growth estimate at 0% for 2020 and wait for June’s indicators to confirm the pace of recovery. Important down side risks remain.

Turkish Economy grew by 4.5% yoy in 1Q20, lower than expectations (5.5% Our vs. 4.9% Bloomberg). Seasonally and cal. adj. quarterly growth also decelerated to 0.6% from the previous 1.9% in 4Q19. We still maintain our GDP growth forecast at 0% for 2020, assuming a partial gradual recovery pattern in the rest of the year.