Bye-bye, recession: Turkey’s economy returns to growth

Turkey’s economy shook off recession to grow 0.9 percent in the three months ending in September from the same period the year before. The data, released on Monday, broke three straight quarters of contraction that followed last year’s currency crisis.

Turkey has a track record of five percent growth, but a 30 percent slide in the lira last year pushed up inflation and interest rates, while domestic demand tumbled. The central bank has since slashed borrowing costs to revive activity.

Monday’s data was roughly in line with a Reuters News Agency poll that forecast one percent year-on-year expansion in the third quarter. The poll also predicted that the economy will grow 0.5 percent in 2019 as a whole.

The government has forecast 0.5 percent growth for this year and five percent growth in 2020. Finance Minister Berat Albayrak wrote on Twitter that leading indicators for the fourth quarter showed growth momentum continues to increase.

But economists say achieving the government’s target could prove difficult.

“The key issue for me is that there is still not that much confidence among households and corporates,” said Piotr Matys, emerging markets foreign exchange strategist at Rabobank.

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