Turkey posts better than expected first quarter growth

Turkey on Wednesday reported better-than-expected growth of 2.3 percent in the first quarter of 2015 from the same period the year earlier, boosted by a rise in consumer spending.

The figure published by the state statistics office was considerably higher than the market consensus of 1.6 percent but analysts said there was still concern about the state of the Turkish economy going forwards.

Annual growth in the fourth quarter last year was 2.6 percent.

Growth in 2014 had dipped under 3 percent to 2.9 percent, in a sign that the stellar growth seen under the Justice and Development Party (AKP) over the last years was coming to an end.

The main driver in the robust first quarter figure was a rise in consumer spending with household consumption up 4.5 percent year-on-year.

"However, this came at the cost of a fall in the domestic savings rate and a rise in the current account deficit," said William Jackson of Capital Economics in London.

"None of this looks sustainable and we think growth will be weak over the coming quarters," he added, predicting growth of 2.5 percent for the full year.

The data was published three days after legislative elections where the AKP lost its majority for the first time in 13 years, with voters concerned about an economic slowdown.