FRANKFURT (MarketWatch) -- Turkey's gross domestic product expanded 11.7% in the first quarter compared to the same period last year, when the economy had contracted very sharply, according to data released on Wednesday.
The performance was slightly better than the 11.5% growth most economists expected.
The Turkish economy grew 6% in the fourth quarter of last year, but overall in 2009 it shrank 4.7%. In the first quarter of 2009, GDP tumbled 14.5%.
"The low base level was very significant -- we're bouncing back off the lows," said Nigel Rendell, London-based senior emerging markets analyst at RBC Capital Markets.
"I don't think you will continue at that pace for the year as a whole," he said. RBC Capital Markets currently expects the Turkish economy to grow by 5.2% in 2010.
Turkey's industry and trade minister, Nihat Ergun, said the economy will likely grow between 6% and 8% in the second quarter, Reuters reported Wednesday.
Full-year growth is likely to exceed 6%, Ergun said, calling a 6.8% OECD forecast "realistic," according to the report.
Lars Christensen, chief analyst at Danske Bank, was even more optimistic. The latest data suggest that GDP growth for 2010 could be as high as 8% year-on-year, according to Christensen.
"Turkey is now growing at rates that are comparable to the fastest growing Asian economies," he wrote in a note to clients. "In this sense, Turkey's economy today looks more Asian than European."
The data are also good news for the local markets, with the Turkish lira likely to outperform its regional peers in the coming one to three months, according to Christensen.
The lira strengthened against the U.S. dollar on Wednesday, while the benchmark stock index in Istanbul rose 0.6% in early afternoon trading.
Rendell of RBC Capital Markets cautioned that factors other than local data are also influencing the currency markets right now.
"It's [the lira] up a little bit so is the ZAR [South African rand] and so is the ruble," Rendell said. "What we've noticed is that most currencies are not reacting to domestic data. People are reacting more to international factors and perceptions about Chinese growth and U.S. growth."
Polya Lesova is a reporter for MarketWatch, based in Frankfurt.
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