'Turkey's Q4 growth marks starting level for 2021'

ANKARA

Turkey’s announcement on Monday that its economy posted growth of 5.9% in the fourth quarter and 1.8% for 2020 overall may be a key signpost for future trends, as the last quarter marks the starting level for 2021, according to some economists.

Turkey and China were the only countries that posted positive growth among all the G20 countries for which data are available, while the rest actually contracted during the same period, due to the coronavirus pandemic.

According to Alvaro Ortiz Vidal-Abarca, chief economist for Turkey at Spanish-based BBVA bank, Turkey’s gross domestic product (GDP) growth continued to be very high in the fourth quarter despite being slightly below expectations.

The carry-over base effect is very high, as it hit near 6%, he noted, adding that this means it will very easy for the economy to achieve GDP growth in 2021 at least of 5% or 6%.

"In this sense, I think this’s year policies should focus on reducing inflation," he urged.

Also commenting on the new figures, Jason Tuvey, a senior emerging markets economist at London-based Capital Economics, said Turkey was one of the few economies around the world to grow last year as a whole.

"Turkey’s recovery from the crisis has, so far, been among the strongest in the emerging world," he said.

Last November’s shift towards more orthodox policymaking, including an aggressive tightening of monetary conditions, prevented Turkey from sliding into a balance of payments crisis, he said.

The country's GDP at current prices stood at 5.1 trillion Turkish liras (some $717.1 billion) last year, according to the Turkish Statistical Institute (TurkStat).

Last year, GDP per capita was 60,537 Turkish liras ($8,599) at current prices.

Turkey's new economic program, announced last September, projected that the Turkish economy last year would grow 0.3%.