Turkey economy grew 3.2% in Q2; seen cooling to 3.35% in 2024 By Reuters

ISTANBUL (Reuters) -Turkey’s economic growth is expected to have fallen to 3.2% in the second quarter of this year as tighter economic policies weighed, a Reuters poll showed on Thursday, with the rate seen cooling to 3.35% for the year as a whole.

The economy grew 5.7% in the first quarter of this year with strong domestic demand pushed up by a minimum wage hike and households bringing purchases forward in expectation of higher inflation ahead.

For the second quarter, the median estimate in a Reuters poll of 11 economists was for GDP growth of 3.2%, with forecasts ranging between 1.6% and 4.2%. 

The economy grew an annual 4.5% in 2023 and 3.9% in the second quarter of that year despite a slowdown in main trading partners and devastating earthquakes in February.

Economists expect tight monetary policies and fiscal measures will continue to slow domestic demand through year end.

GDP growth in 2024 is expected to be 3.35%, based on the median estimate in the Reuters poll. Predictions ranged from 3% to 3.5%.

In the minutes of its rate-setting meeting, released on Tuesday, the central bank said that data suggests second-quarter annual and quarterly GDP growth rates will cool compared to the previous quarter. 

The bank raised its policy rate by a total 4,150 basis points in a tightening cycle since June last year. It has held rates at 50% since March to head off inflation risks. 

The government has pledged to cool inflation, change the composition of economic growth and attain sustainable levels. It will announce new economic forecasts as soon as next week. 

The Turkish Statistical Institute will release Q2 growth data at 0700 GMT on Sept 2.