By Ovunc Kutlu
Goldman Sachs and JPMorgan Chase revised up 2017 growth estimates for the Turkish economy, the banking giants announced Friday.
Goldman Sachs expects the economy to grow 2.3 percent, while JPMorgan Chase estimates a 2.6 percent expansion. The banks previously projected 1.8 percent growth.
The decision comes after the Turkish Statistical Institute released GDP figures earlier Friday that showed a 3.5 percent increase in the fourth quarter and 2.9 percent in 2016.
"Turkish GDP growth rebounded strongly ... exceeding both our and consensus expectations," Goldman said in a note.
The bank said the growth in consumption was a surprise and the strongest recovery was in exports.
"We had forecast that recent political events, political uncertainty and the depreciation of the Turkish lira would limit consumption,” it said.
Consumption increased 5.7 percent in the fourth quarter after contracting 1.7 percent in previous quarter.
Similarly, after exports shrunk 1.9 percent and 9.3 percent in the second and third quarter, respectively, they expanded 2.3 percent in fourth quarter.
"We expect exports to be a key driver of growth in the coming quarters," Goldman said.
JPMorgan Chase said the recent growth figures, despite political uncertainty, are positive for the economy that can perform even better after the April 16 referendum on constitutional changes.
London-based Capital Economics, an independent research company, also revised up Turkey's growth projection from 1.8 percent to 2.5 percent for 2017.
"Growth in consumer spending and fixed investment was faster than previously estimated in the preceding quarters," it said in a note.
The firm expects the economy to grow 2.5 percent next year, too.