ANKARA: Turkey dodged a recession as the economy returned to growth in the last three months of the year, data showed Friday, but its annual growth rate slowed sharply.
The Turkish economy rebounded with 3.8 percent growth in the final quarter of the year compared with the previous three-month period, when it shrank by 2.7 percent on a seasonally and calendar-adjusted basis, according to the Turkish Statistics Office (TUIK).
Gross domestic product (GDP) expanded by 2.9 percent in all of 2016, which is considerably lower than the 6.1 percent growth rate in 2015.
Last year’s growth was nevertheless better than the 2.3 percent consensus forecast of 18 economists surveyed by the state-run Anadolu news agency.
Consumer spending remained strong despite political instability caused by, among other things, the fallout from a failed coup.
An increase in government spending also helped compensate for a nearly 30 percent drop in tourism revenues following a string of terror attacks blamed on religious extremists and Kurdish militants.
The government welcomed the latest figures ahead of a referendum on April 16 on whether to expand the powers of the president and create an executive presidency.
Strong economic growth had been one of the main achievements of President Recep Tayyip Erdogan’s decade in power as prime minister until 2014.
Deputy Prime Minister Mehmet Simsek said a real leap in growth would come on April 17 “because whether or not you want it so, the referendum is seen as a source of uncertainty.”
“Some investors are adopting a ‘wait-and-see’ strategy,” he told the A Haber broadcaster.
The Turkish lira was trading higher at 3.64 to the US dollar after the announcement at 0915 GMT, a rise in the value of 0.48 percent.
Turkey dodges recession
Turkey dodges recession
GCC growth set to accelerate to 4.4% in 2026 on non-oil strength: World Bank
RIYADH: Economies across the Gulf Cooperation Council are forecast to grow 4.4 percent in 2026, accelerating to 4.6 percent in 2027, driven by rising non-oil activity in countries including Saudi Arabia, according to an analysis.
In its Global Economic Prospects report, the World Bank said the Kingdom’s real gross domestic product is projected to grow 4.3 percent in 2026 and 4.4 percent in 2027, up from an expected 3.8 percent in 2025.
Earlier this month, a separate analysis by Standard Chartered echoed similar expectations, forecasting the Kingdom’s GDP to expand by 4.5 percent in 2026, outperforming the projected global growth average of 3.4 percent, supported by momentum in both hydrocarbon and non-oil sectors.
The World Bank’s latest forecast broadly aligns with the International Monetary Fund’s October outlook, which projects Saudi Arabia’s GDP to grow by about 4 percent in both 2025 and 2026.
In its latest report, the World Bank said: “Growth in GCC countries is forecast to increase to 4.4 percent in 2026 and 4.6 percent in 2027, mainly reflecting a steady expansion of non-hydrocarbon activity, in addition to a further rise in hydrocarbon production.”
It added: “The strengthening of non-hydrocarbon activity — accounting for more than 60 percent of GCC countries’ total GDP — is projected to be supported by expected large-scale investments, including in Kuwait and Saudi Arabia.”
Expanding the non-oil sector remains a core objective of Saudi Arabia’s Vision 2030 agenda, as the Kingdom continues efforts to reduce its long-standing reliance on crude revenues.
Highlighting the strength of Saudi Arabia’s non-oil momentum, S&P Global said the Kingdom recorded the highest purchasing managers’ index reading in the region in December, at 57.4, supported by rising new orders, continued growth in non-energy business activity, and expanding employment.
At the country level, the UAE’s economy is projected to grow by 5 percent in 2026, before accelerating to 5.1 percent in 2027.
Oman’s GDP is forecast to expand by 3.6 percent in 2026 and 4 percent in 2027, while Qatar is expected to record growth of 5.3 percent next year, rising sharply to 6.8 percent in 2027.
In Kuwait and Bahrain, GDP growth is projected at 2.6 percent and 3.5 percent, respectively, in 2026.
Across the broader Middle East, North Africa, Afghanistan and Pakistan region, growth is estimated to have reached 3.1 percent in 2025 and is projected to strengthen further to 3.6 percent in 2026 and 3.9 percent in 2027, largely driven by improving performance among oil-exporting economies.
Potential growth challenges
The World Bank also outlined several downside risks that could weigh on economic growth across the region.
These include a re-escalation of armed conflicts, heightened violence or social unrest, which could disrupt economic activity and weaken confidence.
Other risks include tighter global financial conditions, further increases in trade restrictions and tensions, greater uncertainty over global trade policies, and more frequent or severe natural disasters.
For oil exporters, lower-than-expected oil prices or heightened price volatility could also dampen growth.
“A re-escalation of armed conflicts in the region could cause a significant deterioration in consumer and business sentiment, not only in the economies directly affected but also in neighboring economies,” the World Bank said.
It added: “It could spill over into a broader increase in policy uncertainty and a tightening of financial conditions, dampening investment and economic activity.”
Global outlook
The World Bank said the global economy has proved more resilient than expected despite last year’s escalation in trade tensions and policy uncertainty.
Global economic growth is projected at 2.6 percent in 2026, easing from an estimated 2.7 percent in 2025.
“The modest slowdown comes on the heels of a post-pandemic rebound over 2021–25 that represented the strongest recovery from a global recession in more than six decades,” the World Bank said, adding that the rebound was uneven and came at the cost of higher inflation and rising debt.
Among advanced economies, US GDP is projected to grow by 1.6 percent in both 2026 and 2027.
China’s economy is expected to expand by 4.4 percent in 2026 before slowing to 4.2 percent in 2027, while India’s GDP is forecast to grow by 6.5 percent and 6.6 percent over the same period.
