ISTANBUL, Feb 28 (Reuters) – Turkey’s economy expanded by 5.6 percent in 2022, official data showed on Tuesday, but growth has continued after this month’s earthquake caused widespread destruction in the south of the country. was expected to slow sharply to 2.8% in 2023.
In the second half of 2022, the economy started to slow down, reducing domestic and international demand. This is partly due to a slowdown in Turkey’s main trading partner due to the war in Ukraine, which has hit exports.
Growth in Q4 2022 was 3.5%, down from a revised 4% in Q3 and 7.8% in Q2.
According to Turkish Statistics Office data, the financial and insurance business will grow by 21.8% in 2022, followed by the services sector by 11.7%. The only contraction was in the construction sector, which shrank by 8.4%, data showed.
Overall consumption contributed 11.5 percentage points to the annual growth rate, according to economists’ calculations. Net foreign trade and equities fell by 3 points and 5.5 points respectively.
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Haluk Burumcekci of Burumcekci Consulting said pre-disaster indicators suggested that gross domestic product (GDP) growth had rebounded with the help of domestic demand, but the post-disaster annual growth rate now faces risks. Said it was going downwards.
“The magnitude and duration of the impact of the earthquake zone on all sectors, especially manufacturing, will be important in shaping the magnitude of the slowdown in growth expected this year,” he said.
Burumcekci said the likelihood of a slowdown in January was “pretty high,” but stronger growth could be seen in the next quarter as increased production offset losses in other areas.
To combat the economic slowdown, the central bank cut its policy rate by 500 basis points late last year and cut it another 50 basis points to 8.5% last week. To support growth after an earthquake killed more than 50,000 people in Turkey and neighboring Syria. .
GDP growth in 2023 is expected to be 2.8% based on the median estimate of Reuters polls. Forecasts ranged from 1.2% to 3.9%.
A poll conducted in January, before the earthquake, put the median estimate of economic growth in 2023 at 3%.
Business groups and economists say Turkey’s reconstruction could cost up to $100 billion and cut growth by 1-2% this year.
The two devastating quakes on February 6 caused about $34.2 billion in direct physical damage, but total reconstruction and restoration costs could double. world bank said Monday.
Reported by Nevzat Devranoglu and Ali Kucukgocmen. By Darren Butler.Editing: Edmund Blair, Robert Barthel
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