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Turkish economy shrinks for first time since 2009

Xinhua, December 12, 2016 Adjust font size:

Turkey's gross domestic product (GDP) fell by 1.8 percent in the third quarter of 2016 compared to the same quarter of the previous year, the Turkish Statistical Institute (Turkstat) said in a statement on Monday.

It marks the first year-on-year decline in quarterly economic growth since 2009, local Hurriyet Daily News reported.

This followed growth of 3.1 percent in the second quarter of the year, according to official data.

GDP stood at 655.4 billion Turkish liras (186.5 billion U.S. dollars) at current prices.

On the expenditure side, household spending dropped by 3.2 percent in contrast to a 3.7 percent rise in the second quarter. Exports also plunged 7 percent, while imports climbed 4.3 percent.

The production-side breakdown of the GDP showed that the agriculture sector shrank 7.7 percent and industry output fell 1.4 percent. In the meantime, services output dropped sharply by 8.4 percent.

The last time Turkish economy shrank was in the third quarter of 2009 with a 2.8 percent decrease in GDP.

Turkstat also changed its calculation method by switching into the chain linked volume index, revising its second-quarter growth to 4.5 percent from 3.1 percent and first-quarter growth to 4.5 percent from 4.7 percent.

The Turkish currency on Monday extended its losses to trade against the U.S. dollar at 3.5252 after the GDP data was out.

Deputy Prime Minister Mehmet Simsek said Monday that the July 15 coup attempt and terror attacks put Turkey's economy under pressure.

"Turkish economy grew by 2.2 percent in the first nine months of the year. A visible slow-down in global trade, a decline in capital flow into emerging markets and the ongoing geopolitical tensions had an impact on our growth in the third quarter," he added in a written statement.

Finance Minister Naci Agbal said government measures to boost growth and structural reforms will be carried out, and positive global developments will contribute to higher growth in 2017. Endit