Turkey posted surprisingly strong growth last year, official statistics showed Thursday, delighting the government but also raising the spectre of an overheating economy. Gross domestic product (GDP) expanded by 7.4 percent in 2017 compared to the previous year, the national statistics agency said, confirming the country's status as one of the world's fastest growing economies.
But the strong figure failed to boost the Turkish lira, which has struggled in recent months on political concerns as well as worrying inflation and current account figures. Thursday's growth figure came in above the market consensus of 7.25 percent, but fell just short of a forecast by President Recep Tayyip Erdogan who said in December he expected the economy to grow by 7.5 percent in 2017.
The growth rate is markedly better than the 3.2 percent recorded in 2016 when a series of terror attacks and a July coup bid aimed at unseating Erdogan negatively affected the economy. Data from the Turkish Statistics Institute (TUIK) showed that growth was driven by the industrial, services and construction sectors.
Turkish Economy Minister Nihat Zeybekci welcomed the "spectacular achievement", saying that it meant Turkey now ranked first among the G20 economies. One of Erdogan's senior advisors, Hatice Karahan, said on Twitter that "sound government policies supported this success along with an improvement in confidence", adding the focus would now be on reforms.
Meanwhile, London-based emerging markets economist Timothy Ash said in a note that the 7.4 percent figure "puts Turkey well at the top of the European growth stakes, and I guess in the same stratosphere as the likes of China and India". Turkey's growth figure was higher than China's 6.9 percent for 2017.