ANKARA

Turkey’s gross domestic product is expected to expand at a pace of 3.4 percent in 2016 and 2017 due to rising domestic consumption, the international credit rating agency, Standard & Poor’s said Thursday.

In the report prepared by senior economist Tatiana Lysenko, the institute predicts growth over two years despite some weaknesses in other areas.

“Private consumption has once again taken over as the main factor fueling Turkey's economic growth, supported by low oil prices and spending by the large migrant population,” according to the report.

Turkey’s migrant population is estimated to be over two-and-a-half million as of January 2016, according to Turkey’s Immigration Management Office. The country’s total population estimate in 2013 was 75 million.

However, Lysenko warned that there were some weak points in the Turkish economy that might offset advantages of rising domestic consumption.

“While consumer demand has proven resilient to external and domestic headwinds, capital spending and exports remain sluggish,” she added.

According to the report, consumer demand had been consistently high despite the two parliamentary elections in the year, depreciation of Turkish lira and concerns over geopolitics and security. It advised Turkey to work towards reducing fragility sourced from external financing needs.

“High external financing needs remain the key vulnerability for the Turkish economy. To reduce its reliance on external financing, the economy would need to sustainably rebalance away from domestic demand, and focus more on exports,” S&P 500 warned.