The Turkish economy grew by 3.8% in the 2nd quarter

The Turkish economy grew by a more-than-expected 3.8 percent in the second quarter, driven by strong household spending, data showed on Thursday, but activity is expected to slow until the end of the year as election-related stimulus fades and the impact of large interest rate increases takes effect.

Data from the Turkish Statistical Institute showed that the gross domestic product grew by 3.5 percent in the second quarter compared to the previous quarter after adjusting the data according to seasonal and calendar factors.

Household spending rose 15.6 percent year-on-year and imports of goods and services jumped 20.3 percent, partly due to the collapse of the Turkish lira in June and high inflation. Exports fell by nine percent in the same period.

Official data showed that first-quarter growth was revised down to 3.9 percent from 4.0 percent, reflecting the impact of massive earthquakes that devastated the southeast of the country in February, killing more than 50,000 people. The reconstruction process is supposed to cost more than $100 billion.