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Turkey's economy shrinks almost 10% in 3 months

August 31, 2020 at 1:20 pm

Turkish national flags are hung on skyscrapers in Maslak district ahead of the Anniversary of Turkey’s Victory Day, celebrated on 30th of August, in Istanbul, Turkey on August 29, 2020 [Muhammed Enes Yıldırım / Anadolu Agency]

Turkey’s economy contracted 9.9% year-on-year in the second quarter of this year, the country’s statistical authority announced Monday, reported Anadolu Agency.

Gross domestic product (GDP) at current prices amounted to 1.04 trillion Turkish liras ($153.18 billion) in the April-June period, according to the Turkish Statistical Institute (TurkStat).

During the second quarter of the year, several economies – including Turkey – faced economic difficulties due to the measures to stem the COVID-19 pandemic, such as lockdowns and travel restrictions.

“Seasonally and calendar adjusted GDP with chain linked volume index decreased by 11% compared with previous quarter,” the institute said.

In light of the activities constituting gross domestic product, TurkStat said, the value added increased 4% in the agricultural sector year-on-year in the second quarter.

The services – wholesale and retail trade, transport, storage, accommodation and food service activities – and industry sectors’ value added went down 25% and 16.5% on a yearly basis.

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Government final consumption expenditure dropped by 0.8 while gross fixed capital formation fell 6.1% in the second quarter of 2020 compared with the same quarter of the previous year.

“Compensation of employees are increased by 0.5% and net operating surplus/mixed income are decreased by 2.4% in the second quarter of 2020 compared with the same quarter of the previous year, respectively,” the institute noted.

A group of 17 economists surveyed by Anadolu Agency on Thursday had projected the Turkish economy to narrow 11% on an annual basis in the second quarter of this year.

Economists’ forecasts hovered between minus 7% and minus 15%.

The economists also predicted that Turkey’s annual GDP in 2020 would contract 1.8% on average. The country’s GDP expanded 4.5% in the first quarter of this year, and 0.9% in 2019.

Before the onset of the novel coronavirus crisis, the economy was expected to grow 5% in 2020 as laid out in the country’s new economic program announced last September.

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