File Photo: Life and economy in Istanbul. (Photographer: Ismail Ferdous/Bloomberg

Turkey's Economy Expands 7.4 Percent Last Year on Consumption

(Bloomberg) -- Turkey’s economy expanded 7.4 percent in 2017, buoyed by private and government spending, Turkstat reported Thursday.

Gross domestic product grew 7.3 percent in the fourth quarter, beating the median 6.7 percent estimate in a Bloomberg survey of economists. Seasonally adjusted output rose 1.8 percent from the previous three-month period, exceeding the 1.2 percent median estimate in a separate survey.

Turkey’s economic growth has taken off since the government boosted spending to spur the economy following a failed military coup in 2016. The recovery in Europe, Turkey’s largest trade partner, drove up exports and helped full-year growth exceed the government’s 5.5 percent target.

The International Monetary Fund warned last month that the current-account deficit could widen further on strong domestic demand and higher oil prices this year.

The lira was little changed at 4.0100 per dollar at 10:07 a.m. in Istanbul. The yield on Turkey’s 2-year lira notes fell two basis points to 14.28 percent, according to data compiled by Bloomberg.

Turkish household consumption, which makes up about two-thirds of the economy and has traditionally driven growth, increased 6.6 percent in the fourth quarter compared to a year earlier. Public spending on purchases of goods and services rose 7.4 percent during the same period.

Exports of goods and services expanded 9.3 percent in the last three months of the year from a year earlier. Imports grew 22.7 percent.

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