TÜSİAD: "The role of domestic demand in strong growth is remarkable"

TÜSİAD issued a statement following the release of 2010's fourth quarter Gross Domestic Product results by TÜİK (the Turkish Statistical Institute) containing the following viewpoints: 

"The Turkish economy put in a very strong performance in the fourth quarter of 2010, showing a growth rate of 9.2% compared to the same quarter of the previous year. Turkey forged ahead of many countries with growth of 8.9% in 2010 as a whole. While the most significant supporting factor in the annual growth rate was the 9.2% growth value recorded for the fourth quarter of 2010 without the effect of the base year, private sector investments and consumer spending played a decisive role in such strong growth. As expected, the effect of net external demand was negative. Secotr-by-sector analysis shows that manufacturing industry, wholesale and retail trade, and transport, storage & communication were the three top ranking sectors in terms of their contribution to growth.

Leading indicatiors for the first quarter of 2011 show that economic activity maintained its vigor and that this dynamism depends on the domestic demand factor. Moreover, indicators of output potential calculated with various time series methods show that in the period from the first quarter of 2010 until the present period, the economy exceeded potential trend rates. As for the continuing above-trend growth movement in the fourth quarter of 2010, this has still not reached the peak of the 1998-2010 period that was recorded in the first quarter of 2008. When we assess the growing foreign trade and current account deficit in conjuction with commodity and energy prices, the issues of inflationary pressure and the sustainability of the external balance are expected to gain prominence on the agenda. In the coming period, discussions on a return to the ptential output trend are expected to come to the fore. In light of these develpments, TÜSİAD maintains its 2011 growth forecast of 5%."