Turkey's economic growth weakened last year to 2.9 percent, well down on 2013 and creating worries for the Islamic-rooted government ahead of June legislative elections, official data showed on Tuesday. Gross domestic product increased by 2.9 percent in 2014 from the year earlier, well behind the government's official target of 3.3 percent, the Turkish Statistics Institute (TUIK) said on its website.
The economy grew by 2.6 percent year-on-year in the fourth quarter of 2014, according to TUIK, compared to 1.7 percent in the third quarter, 2.1 percent in the second quarter and 4.3 percent in the first quarter.
The government is seeking a growth spurt ahead of the June 7 legislative elections, with President Recep Tayyip Erdogan pressuring the nominally independent central bank for aggressive rate cuts.
The London-based Capital Economics said in a note to clients that the latest quarterly figures were likely to put further pressure on the central bank to act to boost growth. "It seems likely that the central bank will come under renewed pressure from the government to lower interest rates to support domestic demand," it said.
Ozgur Altug at BCG Partners in Istanbul said "the data confirmed that the economy was still slow in the fourth quarter and the expected recovery did not take place."
"Indicators suggest that the recovery did also not take place" in the first quarter of this year, he said in a note to clients.
Erdogan wants strong growth to help win a thumping majority in the coming elections for the ruling Justice and Development Party (AKP) that he co-founded. This would mean Erdogan - who took the presidency in 2014 after over a decade as premier - could achieve his wish of changing the constitution to enshrine the powers of the head of state.
The economic performance of Turkey - which has lagged recently after posting stellar growth rates in the first half decade of Erdogan's rule - is under the spotlight this year as it holds the presidency of the G20 top world economies.
The government's official 2014 growth target in the medium term economic programme was set at 4.0 percent, but was later trimmed to 3.3 percent.
The figure for 2014 is well down on the 2013 figure of 4.0 percent, and economists have warned the country risks entering a phase of reduced growth if reforms are not implemented.
Gokce Celik, economist at Istanbul-based Finansbank, said in an emailed note that despite an upward surprise in the fourth quarter, indicators for the first quarter of 2015 showed no signs of resurgence in economic activity. "If anything, we observe significant sequential deterioration in most of them. "We also acknowledge that June general elections are to remain a source of political uncertainty which might suppress the private investment," she wrote. The government predicts 4.0 percent growth in 2015.
Finance Minister Mehmet Simsek wrote on Twitter that the economy was performing well in a difficult external environment.
"Turkey is growing despite the weak trend in the global economy, the slowdown in our biggest trade partner EU and geopolitical tensions," he said. Simsek added "2014 was the worst of the last 13 years in terms of drought.
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