ISTANBUL: The Turkish economy grew by 4 percent last year, official data showed yesterday, after an unexpectedly firm fourth quarter, but analysts warned of a slowdown amid political uncertainty and tightening credit.
The growth data came the morning after Prime Minister Recep Tayyip Erdogan hailed landslide local poll victories for his AKP party, despite months of turmoil including street clashes and an Internet clampdown.
The political unrest, and severe tensions on Turkish financial markets, since June have rattled investors.
Meanwhile, a slowing of US monetary stimulus for the US economy is reversing a flow of cheap money which had gone into emerging economies, exacerbating weaknesses in the Turkish economy which has experienced rapid growth under Erdogan’s 11-year rule.
Despite the turmoil, gross domestic product grew by 4.4 percent in the last three months of 2013 for a 17th quarterly rise in a row, beating analysts’ expectations, data from the Turkish Statistical Institute showed.
UBS economist Reinhard Cluse said that the latest figures for growth of gross domestic
product again showed that “last year’s political and economic shocks have inflicted surprisingly little damage on the Turkish economy”.
But he warned that “the bigger political and economic shock-waves of recent weeks suggest that a sharper slowdown is now under way” for Turkey, an economy with low exports and driven by credit-fuelled domestic demand.
“While the outcome of yesterday’s local elections removes some uncertainty, we believe the political atmosphere in Turkey will likely remain tense over the coming months and hence imply headwinds for financial markets,” Cluse said.AFP
