Turkey | The economy grew by 7% in 1Q21

Summary

Turkish economy grew by 7.0% in yearly terms in 1Q21 and 1.7% in quarterly terms implying no moderation compared to 4Q20. Current strong momentum, ongoing credit growth and positive global outlook put upside risks on our prudent 2021 growth forecast of 5%.

Key points

• Key points:
• Domestic demand gave a robust contribution of 6.0pp, while the contribution of net exports turned into positive (1.1pp) for the first time after 5 quarters.
• All of the sectors gave positive contributions in yoy terms where the highest support was from the industry with 2.5pp, which was followed by trade, transportation, accommodation sectors’ contribution of 1.4pp.
• The slow-down is still not clear so far due to the reopening again and continuing credit growth rates at moderate levels. Private consumption still accelerates whereas investment stabilizes as of May.
• The strong momentum so far, positive base effects in 2Q and recent upward revisions in global growth forecasts reinforce upsides risks on our prudent 2021 GDP growth forecast of 5%.

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