Turkey emerges from pandemic with 1.8% economic growth in 2020

Turkey emerges from pandemic with 1.8% economic growth in 2020

The old town and the historic port are seen in the southern resort city of Antalya, Turkey. File/Reuters Turkey's economy grew 5. 9 per cent in the fourth quarter and 1. 8 per cent in 2020 as a whole, annual data showed on Monday, emerging as one of only a few globally to avoid a contraction due to the pandemic. Propelled by a burst of credit in mid-2020, fourth-quarter gross domestic product (GDP) grew 1. 7 from the previous quarter on a seasonally and calendar-adjusted basis, the Turkish Statistical Institute said. A surge in gross domestic product growth in the second half of the year that surpassed Turkey's potential rate was driven by a near doubling of lending by state banks to face down the initial wave of the virus. While outperforming all emerging market (EM) and G20 peers except China, Turkey's growth came at a price: The cheap lending accelerated a record drop in the lira, drew down the foreign currency reserves and helped push inflation to 15 per cent. Also, few jobs were created. The recovery was "unbalanced and ultimately exacerbated some of the country's external vulnerabilities," said Jason Tuvey, senior emerging market economist at Capital Economics. Financial