(Bloomberg) — Turkey’s $1.1 trillion economy grew much faster than forecast, avoiding a contraction during a two-quarter stretch when the central bank delivered the bulk of its massive interest-rate hikes.
Gross domestic product expanded 1% in the fourth quarter from the prior three months in seasonally and working-day adjusted terms, according to data published on Thursday. That marked a slight acceleration from the third quarter, when GDP expanded just 0.3%.
Household spending and investment powered a pickup in the fourth quarter that was higher than all but one forecast in a Bloomberg survey of economists, whose median was 0.3%. The economy grew 4.5% in the full year, down from 5.5% in 2022.
“We continue to see a consumption-oriented growth albeit at a slower pace, evident from the momentum loss in imports and the net export contribution to GDP getting closer to zero,” Okan Ertem, senior economist at Turk Ekonomi Bankasi AS.
The pivot toward tighter monetary policy since June was trying to put restraints on consumption that accounts for more than half of gross domestic product. The goal is to engineer a slowdown in inflation swollen from an era of cheap money.
Yet even on an annual basis, the economy fared far better than expected last quarter, with GDP growing 4% from a year earlier. That was more than the 3.5% median estimate in another Bloomberg poll but a slowdown from an upwardly revised gain of 6.1% in the third quarter.
“We are moving toward better quality growth with investment and exports that we strongly support,” Treasury and Finance Minister Mehmet Simsek said in a statement. “In 2024, we expect moderate and balanced growth, with net external demand making a positive contribution.”
A less upbeat outlook doesn’t mean the central bank won’t consider further rate hikes on top of a cumulative 36.5 percentage points of increases through January. Newly installed Governor Fatih Karahan already signaled more tightening could be warranted should domestic demand take off after wage increases in Turkey.
While the economy is shifting into lower gear, the resilience of consumer spending may present a challenge for Karahan as he looks to bring inflation to 36% by the end of the year, roughly half the peak level it’s expected to reach in the coming months.
What Bloomberg Economics Says…
“Household consumption defies gravity in Turkey’s fourth-quarter GDP data — and that is bad news for the central bank. With growth likely to receive a pre-election bump in the first quarter of 2024, pressure is mounting on policymakers to deliver further tightening post the vote. Whether this will be through higher rates or restrictive alternative tools will depend on how inflation progresses over the next few months.”
— Selva Bahar Baziki, economist. Click here to read more.
A quarterly contraction in industrial production during the final three months of last year contrasts with a slight expansion in retail sales. It’s a pickup attributed in part to a recent spike in credit card spending, as consumers brought forward their purchases in anticipation of higher wages ahead of local elections in March.
Economists at Turkiye Garanti Bankasi A.S. said their big data indicators “signal that consumption is not decelerating much further since November,” according to a report this month. “Domestic demand remains stronger than supply, posing risks on both inflation and the current account deficit.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
