Turkey's economic growth eased notably in the first quarter of 2012, to the weakest pace in the current two-year bout of expansion as poor industrial sector performance offset positive effects from external demand.
Gross domestic product increased 3.2 percent year-on-year at constant prices, the Turkish Statistical Institute said Monday. This followed a 5.2 percent growth in the final quarter of 2011.
The economy has been expanding steadily since third quarter of 2009, despite headwinds from the country's massive current account deficit.
A survey by Markit Economics showed Monday that Turkey's manufacturing activity continued to improve in June despite economic difficulties globally. The seasonally adjusted HSBC Purchasing Managers' Index rose to 51.4 in June from 50.2 in May.
On a calendar-adjusted basis, the GDP grew 2.3 percent year-on-year in the first quarter of 2012. Seasonally and calendar adjusted GDP rose 0.2 percent quarter-on-quarter in the first three months of the year.
The recent statistical data showed a decline in trade deficit along with a 20.3 percent jump in exports in May. The central bank said that domestic demand was weak in the first quarter, but is expected to recover in the second quarter.
Most of Turkey's current account deficit is financed by short-term debt and this makes it vulnerable to turmoil in the Eurozone. While upgrading Turkey's bond ratings last month, Moody's Investors Service said that some of Turkey's external vulnerabilities, such as the current account deficit, are now starting to become less pronounced.
The rating agency raised its ratings on Turkish government bonds by one notch to Ba1 from Ba2 with a 'positive' outlook, citing improvement in public finances. This is the highest non-investment grade rating.
The central bank also noted last month that the gradual decline in the current account deficit is expected to continue in the forthcoming period.
In June, the central bank held the interest rate at record low of 5.75 percent and said a revision in the monetary policy stance may be considered, if the fiscal stance deviate significantly from this framework and consequently have an adverse effect on the medium-term inflation outlook.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
April 17, 2026 15:29 ET The ongoing conflict in the Middle East continues to raise concerns for policymakers who worry about the impact of the supply shock and high energy prices on the real economy. Producer price data and various survey results on the housing market were the main news from the U.S. this week. In Europe, industrial production data for the euro area gained attention. GDP figures out of China and the policy move by the Singapore central bank were in focus in Asia.