Turkish economic growth slows down after overheating

Turkish economic growth slows down after overheating

After the June elections and the US president Donald Trump’s sanctions, Turkish lira became the object of interest for many investors and analysts. Recent data given on Monday by the Turkish Statistical Institute demonstrated 5.2% growth year-on-year in the second quarter. Many experts refer to it as an economic rebalancing and adaptation of the Turkish economics to the current crisis.

However, analysts say, that the growth was the result of overheating due to the government spending in preparation for June elections. Moreover, the sanctions from Trump will result in economic decrease in the second half of 2018 and the beginning of 2019.

The last year’s stimulus-fuelled 7.4% GDP growth led to the widespread inflation and the current account deficit. The Trump’s August sanctions caused lira’s instability, which affected business sector and banks. These events are the main reasons lira has lost 40% of its value since January 2018.

The analytical information from the previous week shows how deeply the Turkish economic crisis has affected the country's main sectors. For example, the activity level in manufacturing has been decreasing for 5 months in a row, and the level of car sales fell at a half of its last year results.

The investors are awaiting the meeting of the Turkish central bank on Thursday, which will decide whether it needs to raise its interest rates or not. The last decision in July connected with resisting radical interest rate hike led lira to collapse. Experts think that this decision was influenced by the current Turkish president Recep Tayyip Erdogan, whose is very negative about high interest rates. They also say, however, that the upcoming decision on Thursday will not be necessary and be made just to raise investors’ confidence.

Last week’s analytics shows that USD/TRY fell from 6.64 to 6.4. ABN Amro analysts say that the Turkish currency’s weakness will keep going warning about the future recession in 2019. They forecast USD/TRY level at 8.00 in December.



Latest news

Where is Dogecoin?
Where is Dogecoin?

Did the era of the Dogecoin, the most famous cryptocurrency, come to its end, or it is just a calm before the storm? Let’s find out!

Key Market Driver: FOMC Statement
Key Market Driver: FOMC Statement

The FOMC, a committee within the Federal Reserve, will hold an important meeting and press conference on September 22 at 21:00 MT time (GMT+3).

Deposit with your local payment systems

Be on top of your game

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera