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The Turkish economy reversed the slowdown in the first quarter of 2025, as gross domestic product (GDP) expanded by 4.8% year-over-year between April and June amid global trade turmoil, the Turkish Statistical Institute (TurkStat) reported on Monday.
The figures came out better than expected, as the median estimates from Anadolu Agency (AA) and Reuters polls stood at around 3.9% and 4.1%, respectively.
Quarter-on-quarter, GDP growth rose to 1.6% from 0.7%. TurkStat also revised the first-quarter growth rate to 2.3% from the previous estimate of 2%.
GDP is one of the key economic indicators for countries, representing the total value of goods and services produced within an economy over a specific period.
During the period, the world witnessed one of the largest trade showdowns between the two biggest economies, the United States and China, after President Donald Trump unveiled steep tariff hikes in April, causing major disruption to global trade routes. However, after Trump decided to pause the tariffs temporarily and left room for the nations to negotiate their trade disputes, the turmoil eased toward the end of the period, though uncertainty remained.
According to TurkStat, among the branches of economic activity, the construction sector posted the highest growth rate at 10.9%, followed by the information and communication sector with 7.1%, the industry sector with 6.1%, and the trade sector with 5.6%.
However, output in agriculture and public administration shrank by 3.0% and 1.2%, respectively.
Türkiye’s GDP increased by 43.7% to ₺14.57 trillion ($377.62 billion) at current prices. On an annualized basis, GDP reached ₺52.76 trillion ($1.28 trillion).
TurkStat also reported the annual gross domestic product figures for 2024, which, for the first time, included 2.5 million Syrian refugees under temporary protection in the calculations per capita.
According to the report, Türkiye’s economy expanded by 3.3% in 2024, with GDP by production rising 64.6% to ₺44.58 trillion. During the year, the manufacturing sector held the largest share of the economy at 16%.
GDP per capita in 2024 rose to ₺503,076 ($15,325), placing Türkiye among the countries with higher income levels.
Commenting on the figures, Treasury and Finance Minister Mehmet Simsek said the annual growth in the second quarter rose, supported by calendar effects and a low base.
He added that the continuation of disinflation showed the success of the government’s program.
"On the production side, value added increased in all sectors except agriculture, which contracted due to frost damage," Simsek stated.
"Our manufacturing industry recorded its strongest performance in the past 12 quarters."
Looking ahead, he said, "We expect growth to gradually reach its potential level as financial conditions improve and uncertainties in global trade ease."
Simsek added that the Medium-Term Program covering 2026–28 will soon be published.
"With strong policy coordination, we will continue to implement our program decisively to secure price stability, sustain high growth, and further increase the welfare of our citizens," he said.
Marbas Menkul Degerler, a local brokerage firm, said growth diverged sharply across industries.
"Agriculture, forestry, fisheries, and public administration contracted, while finance and insurance, real estate, other services, and the net tax group remained below 4.8%," the firm said in a note.
It added that construction, information and communication, professional services, and administrative activities grew above the overall average.
"The resilience of the construction sector remains critical for Türkiye’s economy," the firm noted.
Marbas also highlighted that gross fixed capital formation rose by 8.8%, household consumption increased by 5.1%, imports of goods and services grew by 8.8%, and exports expanded by 1.7%.
"Final government consumption expenditures fell by 5.2% due to a focus on savings. Although the trade deficit widened, support on the balance of payments side continues," it added.
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