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Business

Turkey's economy rebounds from post-coup weakness

Turkey dodged a recession as the economy returned to growth in the last three months of 2016. But its annual growth rate slowed sharply due to the fallout from the failed coup in July.

The Turkish economy rebounded stronger than expected in the final quarter of the year, according to the Turkish Statistics Office (TUIK). Between October and December 2016, gross domestic product (GDP) grew at an annualized rate of 3.5 percent.

During the previous three months period, the economy had shrunk by 1.8 percent, marking its worst quarterly contraction since the financial crisis.

For the full year 2016, GDP expanded by 2.9 percent, which is lower than government forecasts, and considerably lower than the 6.1 percent growth rate in 2015.

Consumer spending remained strong despite political instability caused by, among other things, the fallout from a failed coup in July 2016, which had driven tourists away and pushed its currency to all-time lows.

Fewer tourists

A nearly 30 percent drop in tourism revenues following a string of terror attacks blamed on Islamic extremists and Kurdish militants was partly alleviated by an increase in government spending.

Watch video 01:37

Tourism hit hard by Turkey's political turmoil

The latest figures were welcomed by the government ahead of a referendum on April 16 on whether to expand the powers of the president and create an executive presidency.

Strong economic growth had been one of the main achievements of President Recep Tayyip Erdogan's decade in power as prime minister until 2014.

Deputy Prime Minister Mehmet Simsek said a real leap in growth would come on April 17 "because whether or not you want it so, the referendum is seen as a source of uncertainty". "Some investors are adopting a 'wait and see' strategy," he told the A Haber broadcaster.

The Turkish lira was trading higher at 3.64 to the US dollar after the announcement of the data, a rise in value of 0.48 percent.

bea/uhe (AFP, dpa)

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