Turkish GDP growth shrinks to 1.6 pct as lira crisis takes toll

Third quarter GDP shrank a seasonally and calendar-adjusted 1.1 percent from the previous quarter, data from the Turkish Statistical Institute showed.

By REUTERS
Turkish President Tayyip Erdogan addresses his supporters in Istanbul, Turkey June 24, 2018 (photo credit: KAYHAN OZER/PRESIDENTIAL PALACE/HANDOUT VIA REUTERS)
Turkish President Tayyip Erdogan addresses his supporters in Istanbul, Turkey June 24, 2018
(photo credit: KAYHAN OZER/PRESIDENTIAL PALACE/HANDOUT VIA REUTERS)
ISTANBUL - Turkish economic growth dwindled to 1.6 percent year-on-year in the third quarter, official data showed on Monday, falling short of forecasts as a lira crisis and soaring inflation took its toll on the economy.
The major emerging market economy grew more than 7 percent last year but a slowdown to just over 5 percent in the second quarter has accelerated in the second half as a slide in the lira currency begins to bite.
In a Reuters poll, economists had forecast third quarter growth of 2.0 percent year-on-year. The lira eased to 5.3047 against the dollar after the data from 5.2950 beforehand.
Third quarter GDP shrank a seasonally and calendar-adjusted 1.1 percent from the previous quarter, data from the Turkish Statistical Institute showed.
Revised data showed the economy had expanded 5.3 percent year-on-year in the second quarter, from a previously reported 5.2 percent.
The lira has slumped 28 percent against the dollar this year, but has rebounded from record lows in August when it was as much as 47 percent weaker against the U.S. currency.
The lira crisis sent annual inflation to more than 25 percent in October, its highest rate in 15 years, before easing in November.