Growth slowed in Q3 and will slow further in Q4


The Turkish economy grew by 3.9% in the third quarter (Q3), hitting a 3-year low. The growth rate was 7.9% in Q3 2021 and 6.5% in Q3 2020. But what will things look like for a longer period? Let’s look at two more pieces of data to get a better idea.

The growth rate totaled 6.2% in Q1, Q2, and Q3 2022, year-overyear. The growth rate totaled 12.1% in Q1, Q2, and Q3 2021, compared to the same period in 2020.

Growth was 7.1% in the last year, which includes Q4 2021, Q1, Q2, and Q3 2022, compared to the previous year. Last year’s rate, which is calculated in the same way, hovered around 10.5%.

Relatively rapid growth was recorded in 2021 after a low growth rate in 2020 due to the pandemic. The annual growth rate reached 11.4% in 2021.

So, it won’t be a surprise to see that the 2020 data remains below the 2021 data. But it shouldn’t be ignored that 2022 has started to lose power quarterly in terms of growth, compared to the previous year.

The hike, which was 7.5% in Q1 and 7.7% in Q2, fell to 3.9% in Q3, yearover-year. Moreover, the Q4 growth expectation is lower…

Growth is forecasted at 5% for 2022, according to the 2023-2025 Medium Term Economic Program. The growth target was 5%; the estimation hasn’t changed. The necessary Q4 growth rate to ensure a 5% growth for 2022 is 1.9%. But will the economy really grow by 1.9% in Q4?

But the course and calculations based on last year show that such a rate will not be reached this year.

1.9% growth means that over 30% of GDP (Gross Domestic Product) for all of 2022 will be generated in Q4 alone. This has never been seen. So, 1.9% growth seems to be far out of reach.

Q4 growth will hover around 1.1-1.2% in line with the rest of the economy and annual growth trends in previous years by quarters. If the Q4 data hovers at this level, 2022 growth will be at 4.8%. If the rate remains at this level, it means that the seasonally and calendar-adjusted GDP will decline in Q4, as compared to Q3. The seasonally and calendar-adjusted GDP contracted by 0.1% in Q3 as compared to Q2.

The one-year GDP, which includes the last four quarters, has reached USD 842bn as of Q3 2022. This figure totaled USD 798bn last year.

Thus, GDP grew by 5.5% on a USD basis in the last year, compared to the previous year.

USD/TRY is critical to calculating the USD -based GDP. USD/TRY averaged 17.63 in Q3. USD/TRY, which remained at the same level in the last week of August and during September, kept the USD-based GDP high.

But the situation is much clearer now. USD/TRY was at the same level in the last two months of Q4. USD/TRY will average at 18.50-18.60 if there is not much change in December.

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