Turkish Economy Grows by 2 percent in First Quarter

Gross domestic product (GDP) at current prices soared 36.7 percent to 12.12 trillion Turkish Liras ($335.5 billion) in January-March compared to the same period last year, TÜİK said.

“With our program, we are strengthening the foundations of sustainable high growth by increasing the resilience and dynamism of our economy,” Finance Minister Mehmet Şimşek wrote on X, commenting on the growth data.

While the economy continues to grow moderately, disinflation continues, he said, adding that the ratio of current account deficit to national income maintained its sustainable level at 0.9 percent annually.

“We rapidly implement the necessary measures against the effects that may arise during the disinflation process: We support investment, employment, production and exports,” Şimşek said.

In the fourth quarter of 2024, the Turkish economy expanded by 3 percent year-on-year, while in the whole of 2024, the country’s GDP grew by 3.2 percent compared to the previous year.

On a quarterly basis, Turkey's GDP increased by 1 percent in the three months to March, down from 1.7 percent in the previous quarter.

The industry sector, which expanded 1.4 percent annually in the final quarter of 2024, contracted 1.8 percent year-on-year in the January-March period of 2025, data from the statistics authority showed.

Manufacturing output fell 2.4 percent from a year ago in the first quarter, while the agriculture sector shrank 2 percent after growing 4.7 percent in the previous quarter.

The annual expansion in the construction sector slowed from 8.7 percent in the fourth quarter of 2024 to 7.3 percent in January-March this year.

Final consumption of households increased by 2 percent from a year ago, slowing from the 3.9 percent rise recorded in the previous quarter.

The government’s final consumption expenditure, which rose by 1.6 percent in the fourth of 2024, was up 1.2 percent year-on-year in the first quarter of 2025, while the annual growth in fixed capital formation eased from 6.1 percent to 2.1 percent, according to data from TÜİK.

Exports of goods and services were unchanged from a year ago in January-March, after falling 2 percent annually in September-December last year.

The year-on-year increase in imports of goods and services accelerated from 1.6 percent to 3 percent.

The share of compensation of employees in the Gross Value Added at current prices was 43.7 percent in the first quarter of 2025, while it was 41.7 percent in the previous year, TÜİK said.

The share of net operating surplus/mixed income declined from 36.4 percent in the first quarter of last year to 35 percent.

Source: HDN