Turkey’s economy grew 5% in the fourth quarter and expanded 0.6% in the year as a whole, just above the government forecast, a Reuters poll showed on Monday as the country shook off the recessionary impact of a 2018 currency crisis.
The major emerging market economy contracted 2.3% in the first quarter and 1.6% in the second quarter, before growing a modest 0.9% year-on-year in the third quarter.
In a poll of 16 economists, the median forecast was for 5.0% year-on-year growth in the fourth quarter.
Haluk Burumcekci, of Burumcekci Consulting, told Reuters that while a decline in foreign demand had hit growth, consumption and retail sales were strong.
“With the contribution of delayed domestic demand coming into play due to the fall in loan interest rates, we are seeing a large growth in the fourth quarter,” he said.
Turkish economic growth has averaged around 5% over the last two decades. But the 2018 crisis cut the Turkish lira’s value by nearly 30%, sent inflation soaring and severely crimped imports.
The central bank responded to the crisis by raising its policy rate to 24%, where it had stayed until last July. It has cut rates by 1,325 basis points since then in order to boost growth.
Full-year growth was seen at 0.6%, just above the government’s forecast of 0.5% announced in September. Previously it had forecast 2019 growth of 2.3%.
Economist forecasts for fourth quarter growth ranged between 4.0% and 6.1%, full-year growth forecasts range between 0.4% and 1%.
Turkish industrial production climbed 8.6% year-on-year in December, rising for a fourth straight month, further signalling a sharp economic pickup in the last quarter of 2019.
Economists predicted annual 4% growth this year according to median estimate of the poll, below a government forecast of 5%.
The Turkish Statistical Institute will publish the Turkish economic growth data on March 2 at 0700 GMT.