Turkey’s economy grew 5.7 per cent in the first quarter of the year, in line with expectations, official data showed on Friday, growing strongly as domestic demand boosted the economy.

In a Reuters poll, the economy was forecast to have expanded 5.7 per cent in the first quarter. The poll predicted growth of 3.15 per cent in 2024 as a whole.

Growth is expected to slow during the rest of the year as the central bank’s aggressive monetary tightening in the face of soaring inflation exerts an impact.

Turkey’s economy grew an annual 4.5 per cent in 2023 and 4 per cent in the first quarter of that year despite a slowdown in main trading partners and devastating earthquakes in February.

The central bank raised its policy rate by a total 4,150 basis points in a tightening cycle since last June, the latest one to 50 per cent in March, citing deterioration in the inflation outlook. It has kept the benchmark rate steady since then and vowed to act if the inflation outlook worsens.

Economists have said the annual minimum wage hike and households bringing purchases forward in expectation of higher inflation in the future led to strong growth ahead of the local elections on March 31.

Even with tighter monetary conditions, first-quarter gross domestic product (GDP) grew 2.4 per cent from the previous quarter on a seasonally and calendar-adjusted basis, data from the Turkish Statistical Institute showed.

In Q1 the total value added increased by 11.1 per cent in construction and 5.5 per cent in information and communication. Final consumption expenditure of resident households increased by 7.3 per cent. Exports rose 4 per cent and imports fell by 3.1 per cent in the first quarter, the data showed.