Turkey's gross domestic product (GDP) growth rate came in above the latest expectations at 2.9 percent in 2016, while per capita income was $10,807, according to data released by the Turkish Statistical Institute (Turkstat) on Friday.

Despite ongoing conflict with various terror groups, a botched coup attempt on July 15, domestic political tensions and strained relations with the West, the Turkish economy outperformed many of the developing and developed countries in the world with a 2.9-percent growth rate. The GDP growth rate was 3.5 percent in the third quarter of 2016, bringing the average growth rate in 2016 to 2.9 percent.

The annual growth rate was much higher than the median forecast recorded by Anadolu Agency's (AA) Finance Desk survey, which had envisaged a 2.3 percent GDP increase in 2016 from a year earlier.

Turkey's fourth-quarter GDP reading was also substantially higher than experts' median estimates, coming in at 3.5 percent compared to a 2.4 percent survey prediction. The better-than-expected figures were partly related to the upward revision of previous quarters. Calendar adjusted gross domestic product in the fourth quarter of 2016 increased by 3.5 percent compared to the same quarter of previous year. Seasonally and calendar-adjusted GDP increased by 3.8 percent compared to the previous quarter.

The GDP growth rate was 4 percent in 2015, while per capita income was $9,177, decreasing from $10,279 in 2014. With the rise in 2016, the per capita income surpassed the 2014 rate. The per capita income goal for 2016 was set as $9,261 in 2015, whereas the projection in the government's medium term economic program was $9,243.

Among the activities that constitute GDP, the total value added of the activities constituting the agricultural sector decreased by 4.1 percent in 2016 compared with the previous year in the chained linked volume index, the total value added of the activities constituting the industry sector increased by 4.5 percent, the total value added of the activities constituting the construction sector increased by 7.2 percent and the total value added of the activities constituting the service sector decreased by 0.8 percent.

Turkish economy escapes recession thanks to effective measures

Deputy Prime Minister Mehmet Şimşek assessed Turkey's economic growth figures for the year 2016 announcing it on Friday in a program he attended on Turkish news channel A Haber.

Pointing out that the economy grew much more than expected in 2016, Şimşek said, "The recovery was fast and Turkey did not technically enter a period of recession, which is very important."

Şimşek underlined that the country's economy faced tremendous shocks in 2016, especially with the coup attempt of July 15, recalling that when there were coup attempts and coups in the past, the economy had not been able to recover for three-to-five years.

Şimşek stressed that an economy enters a recession if it shrinks for two quarters in a row and underscored that the Turkish economy escaped a recession period by its above-the-expectations performance in the fourth quarter of 2016. This indicates the strength of the bases of the Turkish economy and how powerful the effects of the measures taken by a government are.

According to Şimşek, the data received in the first quarter indicates that the growth will be moderate this year, and as of the middle of the second quarter, the recovery will gain momentum. "Especially if a very strong 'yes' comes out, we will see the future predictability increase. The measures we have taken at the point of investment mobilization will kick in. Tax cuts have already begun to take effect," Şimşek added.

Solidity of economy proven by growth data

Evaluating the growth figures, Bülent Gedikli, chief adviser to President Recep Tayyip Erdoğan, said that these figures once again show the solidity of the bases of the Turkish economy despite the July 15 coup attempt and all domestic and international attacks, while also proving that the reports released by credit rating agencies serve political purposes.

Highlighting that the Turkish economy, which will move toward a rapid upturn in the aftermath of the April 16 referendum, has to catch at least 5 percent growth, Gedikli said, "We know that the political stability, national unity and solidarity and the Turkish people with entrepreneurial spirit will be able to catch these figures. This is also the reason why we have been saying 'trust and come' to foreign and domestic investors since the morning of July 16." The economic measures taken by the government will be reflected in the figures of the second and third quarter, he added.

Growth secured with gov't initiatives

In a written statement, Finance Minister Naci Ağbal drew attention to the importance of the decisions taken following the contraction in the third quarter of 2016. Recalling that after the shrinkage in the third quarter, the growth rate of the economy exceeded expectations with a 3.5 percent growth in the fourth quarter along with the influence of the decisions taken by the economy administration, Ağbal noted that this growth shows that the bases of the Turkish economy are robust and that the dynamic growth structure continues.

Informing that domestic demand, which is the driving force of the economy, has accelerated in the last quarter and private consumption expenditures have increased by 5.7 percent, Ağbal said that 2-percent growth in the investments in this period is also very important for the over economic outlook, adding that public spending has also continued to make a positive contribution to economic growth.

Stressing that an increase in confidence and predictability in the economy after the referendum will also positively affect the economic outlook, Ağbal added that with the Presidential System, political stability will be reinforced and efficiency in administration will increase, while structural reforms will gain momentum and Turkey's economic growth performance will continue to increase.

Economists also analyzed the latest growth data, which came surprising as it indicates rates that exceeded expectations.

AA Finance analyst and economist Haluk Bürümçekçi said that the fourth quarter growth rate of 2016 was way above the average expectations with 3.5 percent, pointing out that the growth rate of the previous quarter was revised from minus 1.8 to minus 1.3 and the second quarter growth was revised from 4 percent to 5,3 percent.

Suggesting that the indicators related to the power of growth trend indicate a significant increase compared to the previous quarter, Bürümcekçi stated that the gross domestic product (GDP) figures calculated with the production method bring forth the industry and construction as the locomotive sectors in the last quarter.

Bora Tamer Yılmaz, an economist at Ziraat Bank, stated that the domestic demand in Turkey quickly overcame the July 15 shock with the financial, monetary and macroprudential measures.

Noting that private consumption in domestic demand contributes 3.7 percent to growth, Yılmaz said, "Data such as car sales and housing sales were leading indicators. Nevertheless, it is understood that with the improvement in global demand and trade conditions, foreign demand also significantly accelerated growth in the last quarter of the year."

Yılmaz also added that net exports contributed 2.6 percent to growth while imports did not increase due to exchange rate hikes, which also supported the net exports positively.