Turkey’s economy slides into recession

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EPA

Turkey went into recession at the end of last year, according to the country’s official statistics office.

The Turkish Statistical Institute said the economy shrank by 2.4% in the fourth quarter of 2018, from the previous quarter.

It followed a 1.6% decline in the previous quarter, making two quarters of falling growth – the official definition of recession.

A currency crisis has hit the Turkish economy.

Turkey’s lira fell by 30% against the dollar last year, making imports on average a third more expensive.

That prompted the central bank to raise interest rates, making borrowing more expensive.

Car and housing sales suffered as a result and industrial production was also hit.

The final quarter’s data leaves economic growth of 2.6% overall for 2018, the slowest since 2009.

Turkey’s economy grew by a far faster 7.4% in 2017.

The news comes as Turkish President Recep Tayyip Erdogan, fights to keep his party in control of key cities Ankara and Istanbul in nationwide local elections.

Rising prices, especially for food, and high unemployment, are major election issues.