Turkish economy grows 21.7 percent in second quarter
The Turkish Statistical Institute (TÜİK) has announced that the gross domestic product expanded 21.7 percent in the second quarter of 2021 compared to the same quarter last year. However, growth was only 0.9 percent compared to the quarter prior to the pandemic closing.
K. Murat Yıldız / Duvar English
The Turkey Statistical Institute (TÜİK) announced the Gross Domestic Product (GDP) data for the second quarter of 2021. According to the data, the Turkish economy grew by 21.7 percent in the second quarter of this year.
The economy, which was largely shut down last year due to the pandemic, showed growth this year during the same period. Yet, when comparing first quarter of this year to the first quarter of the previous year, the economy grew by 21.7 percent, falling short of expectations and realizing only 0.9 percent.
"The growth is a disappointment to workers as the share of labor payments in value added decreased from 37 percent to 32.9 percent. In other words, the economy grew, but this growth did not attract citizens. What grew were export-based companies. However, what is necessary for ideal growth is agriculture, balanced sectoral growth, and a fair distribution of the income generated," Economist Evren Devrim Zelyut told Duvar English.
Minister of Trade Mehmet Muş made a statement on the subject, saying, "Turkey's exports continue to increase. In the second quarter, growth reached a new high of 21.7 percent. Our exports of goods and services contributed 10.8 percentage points to growth. This is the highest level seen since 1998. Exports of goods and services accounted for half of the growth."
First-quarter growth revised
TÜİK, on the other hand, revised its first-quarter growth rate to 7.2 percent. The first quarter's growth was reported to be 7 percent.
When looking at the activities that make up GDP, in the second quarter of 2021, as a chained volume index compared to the previous year, services 45.8 percent, industry 40.5 percent, professional, administrative, and support service activities 32.4 percent, other service activities 32.3 percent, information and communication activities 25.3 percent public administration, education, human health, and social services 45.8 percent, industry 40.5 percent, professional, administrative, and support service activities 32.4 percent, other service activities 32.3 percent, and information and communication activities 25.3 percent. Service activities grew by 8.5 percent, real estate grew by 3.7 percent, construction grew by 3.1 percent, and agriculture, forestry, and fisheries grew by 2.3 percent. Finance and insurance-related activities, on the other hand, fell by 22.7 percent.
In comparison to the previous quarter, the seasonally and calendar adjusted GDP chained volume index increased by 0.9 percent. In the second quarter of 2021, the calendar adjusted GDP chained volume index increased by 21.9 percent over the same quarter the previous year.
In a statement, Treasury and Finance Minister Lütfi Elvan stated that, "Investments and net foreign demand accounted for 57 percent of second-quarter growth. Low inflation, exchange rate stability, and predictability are essential for long-term, inclusive growth. We strive to maintain a rate of growth that improves income distribution equity."
In the second quarter of 2021, the estimated GDP by production method increased by 52.4 percent at current prices compared to the same quarter the previous year, reaching 1.58 trillion liras. At current prices, GDP for the second quarter was 188.56 billion dollars.
Consumption expenditures of resident households increased by 22.9 percent
Consumption expenditures of resident households increased by 22.9 percent in the second quarter of 2021 as a chained volume index compared to the same quarter the previous year. The final consumption expenditures of the government increased by 4.2 percent and the gross fixed capital formation increased by 20.3 percent.
Meanwhile, exports of goods and services increased by 59.9 percent in the second quarter of 2021 compared to the same quarter the previous year, imports increased by 19.2 percent and labor payments increased by 36.1 percent over the same quarter the previous year, and net operating surplus (mixed income) increased by 78.2 percent according to TÜİK data.
In addition, the share of labor payments in Gross Value Added was 37 percent at current prices, but by 2021, it had dropped to 32.9 percent. The percentage of net operating surplus increased from 42.8 to 49.8 percent.
No real economic progress
“Look at the industry growth data for the last 42 months and you'll see how we either didn't grow in reality or grew weakly. There is ‘immiserating growth’ in Turkey,” Economics Professor Veysel Ulusoy from Yeditepe University told Duvar English.
“They said that we grew. The reason for that is that the previous year during this period due to pandemic conditions our economy shrunk. This has resulted in the growth rate that has been announced. Turkey is not progressing; it has made no progress in terms of investment, consumption, or national income,” Ulusoy concluded.