Turkey grew 5.6% in 2022

Turkey's economy expanded 5.6% in 2022, data from state statistics agency TUIK showed on Tuesday, but growth was expected to slow significantly in 2023 after earthquakes this month caused widespread destruction in the south of the country.

The growth rate was faster than expected in the final quarter of 2022, Bloomberg said, driven by an increase in government and private spending.

Gross domestic product rose 3.5% in the October-December period from a year earlier, according to data released by TUIK.

In 2022, finance and insurance activities grew 21.8%, followed by the services sector which rose 11.7%, TUIK said. The only contraction was recorded in the construction sector, which shrank 8.4%, the data showed.

The World Bank said on Monday that the earthquakes caused around $34.2 billion in direct physical damage and that it would lower its 2023 GDP growth forecast by about half a percentage point from its initial 3.5%-4% estimate.

The central bank lowered its key interest rate to 8.5% this month to mitigate the quakes’ impact on growth. The easing cycle that began last year saw rates fall by a cumulative 550 basis points, in line with President Tayyip Erdogan’s call for lower borrowing costs.