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Turkish economy logs rapid growth

June 12, 2017

The Turkish economy is recovering faster than expected by most analysts, fresh data have revealed. The finance ministry says growth is bound to continue on the back of tax reductions and other incentives.

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Turkish port

The economy in crisis-hit Turkey logged a better-than-expected expansion of 5.0 percent in the first quarter year on year, data from the national statistics office showed Monday.

That leaves GDP only 0.3 percent lower compared with the second quarter of 2016, that is the last quarter before the putsch in the country.

In a quarter-on-quarter comparison, Turkey's Q1 GDP rose by 1.4 percent, an increase three times stronger than that logged for the eurozone in the January-to-March period.

The fresh figures showed that the main driver behind the strong first quarter were exports, with shipments abroad surging by 10.6 percent.

Helpful lira devaluation

"That appears in part to have been a result of the weakness of the lira supporting the competitiveness of goods exports," Capital Economics analyst William Jackson said in a statement.

Turkey: Rise and fall of a promising economy

The lira has lost over 20 percent against the greenback over the last year, although it has rallied slightly in recent months.

Finance Minister Naci Agbai is confident there will be a further pick-up in economic performance in the months ahead as a result of  strong domestic consumption and tax reductions, coupled with a string of other incentives to spur growth.

Last week, the World Bank said it expected Turkey's full-year gross domestic product to expand by 3.5 percent in 2017 and 3.9 percent in 2018.

hg/jd (dpa, Reuters)