Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Turkish economy to contract in second quarter, log zero growth this year: Reuters poll

EconomyAug 29, 2019 09:10AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Behiye Selin Taner and Nevzat Devranoglu

ISTANBUL/ANKARA (Reuters) - Turkey's economy is expected to shrink in the second quarter, its third straight quarterly contraction as it grapples with the effects of recession, and a Reuters poll on Thursday also pointed to zero growth in 2019 as demand and investment slows.

The poll of 18 economists showed the economy shrinking 2% year-over-year in the second quarter, based on the median, and estimated annual growth of 0% for 2019, as last year's currency crisis continues to weigh on the major emerging market.

Forecasts for the second quarter ranged from a 1% to 2.2% contraction. Estimates for annual GDP ranged from 1% growth to a 2% contraction, which on the whole was more optimistic than a July poll predicting the economy would contract this year.

"We expect the weak trend in investments to continue again and therefore have a bigger negative impact on GDP than in the previous quarter," said Ozlem Bayraktar Goksen, chief economist at Tacirler Yatirim.

Turkey, the largest economy in the Middle East, has a track record of more than 5% growth. But a diplomatic dispute with the United States last year and the currency crisis that wiped out more than 30% of the currency's value triggered a contraction of 3% in the fourth quarter.

In the first quarter of 2019, the economy contracted 2.6% year-on-year even as it returned to growth on a quarter-on-quarter basis. It may again narrowly log quarter-over-quarter growth in Q2, economists say.

Second quarter GDP growth is due to be announced on Sept. 2.

A sharper than expected fall in industrial production in June, shrinking retail sales in recent months, and limited public consumption contributed to weakness in the second quarter.

On the other hand net exports, helped by weakness in the Turkish lira, "will continue to be the biggest positive contributor to GDP," Goksen said, predicting a 1.5% year-on-year GDP rise in the second half of the year despite risks stemming from weak credit growth.

"At this point, we hold our 2019 forecast as a 0.3% annual contraction. We think there are downward risks," she said.

A Reuters poll of more than 40 economists in July showed the contraction in Turkey's economy was expected to continue until the third quarter of the year, with positive growth seen in the final quarter of 2019.

At that time, economists had forecast a 1.5% contraction annually for 2019. The government's own sharply-lowered forecast for the year envisages growth at 2.3% in 2019, and 3.5% in 2020.

Turkey's economy last contracted on an annual basis in 2009, by 4.7%.

Turkish economy to contract in second quarter, log zero growth this year: Reuters poll
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email