Turkey's Q1 economic growth seen at 2.3%, full-year at 3%: Reuters poll
ISTANBUL, May 27 (Reuters) - Turkey's economy is expected to have grown by 2.3% in the first quarter and by 3% for 2025 as a whole, lower than government forecasts, a Reuters poll showed on Tuesday.
The big emerging market economy expanded by 3% in the fourth quarter and 3.2% in 2024 a whole. Estimates of ten economists in the Reuters poll for the first quarter ranged from 1.5% to 3.2%, with the median at 2.3% gross domestic product (GDP) growth.
Economists forecast an expansion of 3% this year, slightly lower than last year, the poll showed, reflecting the effects of monetary tightening.
In December, the central bank started an easing cycle after having kept the main policy rate steady at 50% for eight months. Inflation has dipped from as high as 75% last May.
In March and April, the bank tightened its policy rate by 350 basis points and raised the lending rate to 49% in response to market turmoil that erupted over the arrest of Istanbul Mayor Ekrem Imamoglu, President Tayyip Erdogan's main political rival.
Economists expect the central bank to return to easing this summer albeit with fewer cuts throughout the year. While the tight policy has helped cool inflation, it has the potential to also cool economic growth, which is already under pressure from global trade wars.
The government has forecast 4% economic growth this year.
In a research note, Goldman Sachs said economic growth lost some momentum in the first quarter and that the monetary tightening since March has increased downside risks.
"Activity was driven predominantly by household consumption in Q1, supported by expansionary fiscal policy since the H2 last year and monetary easing since December," the Wall Street bank said.
The central bank is now "focusing more on the need for a demand slowdown for further disinflation," Goldman added. "However, we are sceptical that policy will remain tight for long enough to reduce momentum meaningfully."
The Turkish Statistical Institute is expected to release the official Q1 GDP data at 0700 GMT on Friday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
27 minutes ago
- Reuters
Russia to provide state support for ailing coal industry
MOSCOW, May 30 (Reuters) - The Russian government said on Friday it had agreed to support the struggling coal industry, including by deferring tax payments, as well as by limiting dividends and bonuses to top management. Russian coal producers face a number of challenges, including international sanctions over Ukraine. According to the government, the country's coal exports fell almost 8% to 213 million tonnes last year, while production rose 1.3% to 438 million metric tons. The European Union, which previously depended on Russia for around 45% of its coal imports, banned supplies from Russia in 2022. Under the government measures, Russian coal companies will be granted a deferral of mineral extraction tax (MET) and insurance contributions until December 1 2025. The possibility of debt restructuring is envisaged for indebted companies, taking into account the position of the Central Bank of Russia, the government added. Russia's NEFT Research consultancy said Russia's coal exports have been declining due to the international sanctions, rising transportation costs and weaker demand. It cited energy ministry data, which showed that the Russian coal industry had lost 1.2 trillion roubles ($15 billion) since 2022 due to the sanctions, including the loss of lucrative markets in Europe and difficulties in getting payment for supplies. ($1 = 78.5000 roubles)
BBC News
40 minutes ago
- BBC News
India GDP: Growth at 7.4% faster than expected in fourth quarter
India's economy grew by 7.4% in the period between January and March - up from 6.2% the previous quarter and significantly beating analyst expectations. However, growth for full 2024-25 year, which runs between April and March, is pegged at 6.5% - the slowest in four years. The country's central bank - the Reserve Bank of India - meets later in June and is expected to cut rates for the third time in a row to boost remains the world's fastest growing major economy, although growth has sharply dropped from the 9.2% high recorded in financial year 2023-24. Asia's third-largest economy benefitted from strong growth in farm activity, steady public spending and improved rural demand in the last financial year, even as manufacturing and new investments by private companies remained weak. While rural growth has improved on account of a strong winter harvest it is not nearly enough to offset continuing weakness in urban consumption, which has flagged due to high unemployment and lower growth engine remains heavily dependent on the government's infrastructure spending on roads, ports and highways, in the absence of significant growth in private investment. Going forward, lower food inflation and oil prices as well as the pre-arrival of the monsoon and above average rainfall could boost crop prospects and help India's farm sector, according to growth should also benefit from government's income tax cuts announced in the federal budget, as well as "monetary easing, expectations of an above normal monsoon and lower food inflation", Aditi Nayar, an economist with the ratings agency Icra, said. But ongoing global uncertainties, including US President Donald Trump's trade war, are expected to weigh on export is currently negotiating a trade-agreement with the United States which is officially expected to conclude by fall. Trump slapped tariffs of up to 27% on Indian goods in April – and a 90-day pause on these ends on 9 expect GDP growth in the ongoing financial year 2025-26 to further slow to 6% on the back of these global slowdown worries which could delay new private capital spending on projects. The International Monetary Fund (IMF) expects global growth to drop to 2.8% in 2025 and 3% in from Icra earlier showed private sector expenditure, as part of overall investments in India's economy, fell to a 10-year low of 33% in the last financial foreign direct investment (FDI) into India – at $0.35bn in 2024-25 – also fell to the lowest level in two decades, as rising outward foreign investment and repatriations by Indian companies, neutralised inward Minister Narendra Modi's government has been attempting to position India as a manufacturing hub for global companies like Apple indicated recently that it was shifting most of its production of iPhones headed to the US from China to India, trade analysts have cautioned that such manufacturing investment could yet stall, with the US and China agreeing to roll-back tariffs earlier this month.
Reuters
an hour ago
- Reuters
Kremlin expects Russia and Ukraine to discuss ceasefire conditions in Istanbul
MOSCOW, May 30 (Reuters) - The Kremlin expects Russia and Ukraine to discuss the list of conditions for a ceasefire in the war in Ukraine next week in Istanbul, its spokesman said on Friday, praising the U.S. role in mediating the talks. Russia has proposed holding the second round of talks with Ukraine in Istanbul on June 2. However, Ukraine wants to see Russia's proposals for a peace deal before it sends a delegation to Turkey, Foreign Minister Andrii Sybiha said on Friday. Kremlin spokesman Dmitry Peskov said the Russian delegation would be travelling to Istanbul and would be ready for talks with Ukraine on Monday morning. "At the moment, everyone is focused on the direct Russia-Ukraine negotiations. A list of conditions for a temporary truce is being developed," Peskov told reporters. He said the details of the memorandum will not be published. Reuters reported earlier this week that Putin's conditions for ending the war in Ukraine include a demand that Western leaders pledge in writing to stop enlarging NATO eastwards. U.S. President Donald Trump's envoy to Ukraine, Keith Kellogg, said earlier on Friday that Russia's concern over the eastward enlargement of NATO was fair and the United States did not want to see Ukraine in the U.S.-led military alliance. Commenting on Kellogg's statement, Peskov said that Putin has been consistently conveying Russia's position on the inadmissibility of NATO's eastward expansion. "We are pleased that these explanations by the president are understood, including in Washington. And, of course, this is quite appealing to us in terms of the mediating role that Washington continues to play," Peskov said. Russia launched its full-scale invasion of Ukraine in February 2022 after eight years of fighting in eastern Ukraine between Russian-backed separatists and Ukrainian troops.
