In the light of the fully-released leading indicators of the first three months of this year, Turkey's GDP is estimated to grow by 7.4 percent year-on-year in the first quarter of 2018, according to the Bahçeşehir University Center for Economic and Social Research (BETAM). The institution's former estimate was 7.2 percent. "The reason for this revision is that the rise in updated private consumption and investment indicators appeared higher than expected. The striking increase in public investment continues," a report released yesterday by the institution read.
The report said the institution did not change its previous quarter-on-quarter forecast using seasonally and calendar day adjusted data. "Accordingly, the quarter-on-quarter growth rate is expected to be 1.4 percent in the first quarter of 2018 compared to the previous quarter," explained the report.
Compared to the same quarter of the previous year, BETAM observes that all consumption leading indicators will increase in the first quarter of this year.
"We expect strong increases in consumption goods import, consumer loans, public consumption and non-durable goods production in the first quarter of 2018," it said.
"In the light of summarized observations, we expect that the increase in investment will continue to be high in the first quarter of 2018," it added.
BETAM also remarked in the report that seasonally and calendar day adjusted real exports, which increased by 2.2 percent in the previous quarter, will increase by 0.2 percent on a quarterly basis in the first quarter of 2018. "The increase in real imports is higher (0.9 percent) which expands foreign trade deficit."
Looking at gold-excluded foreign trade, the report said, there is a relatively higher increase in exports (2 percent) while a decrease (1 percent) in imports.
"Compared to the same quarter of the previous year, we anticipate that all foreign trade indicators will go up in the first quarter of 2018. While the increases in imports and gold-excluded real imports are comparable in the first quarter of 2018 and in the last quarter of 2017, the increases in exports and gold-excluded real exports are prominently lower," the report added.
All in all, the institution reported that compared to the same quarter of the previous year, an increase is expected in all leading indicators. "But, the 12.5 percent increase in investment expectation over the next 12 months and the 10.2 percent increase in demand for services [last three months] should be underlined," it stated.
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