Turkey's Gross Domestic Product grew by 3.1 percent in the second quarter of 2016 compared to the same period in 2015, the Turkish Statistical Institute reported Friday.
The figure was slightly short of the median forecast by the Anadolu Agency Finance Desk, which predicted a 3.3 percent expansion in the second quarter.
The GDP increased by 3.1 percent compared to the same quarter of previous year in the second quarter of 2016 and reached 33.06 billion Turkish liras ($11.4 billion) at constant prices, the report said, suggesting the economy had maintained its momentum according to constant prices, which excludes inflation effect from prices.
At current prices, the GDP saw a more pronounced increase, rising to $525.9 million Turkish liras ($178.9 billion), which is up 9 percent compared to the same quarter of previous year.
The report showed that a seasonal and calendar-adjusted GDP increased by 0.3 percent compared to the previous quarter.
Also, the first quarter of GDP was downgraded 0.1 points to 4.7 percent from the previously announced 4.8 percent.
I would trade Obama for Erdoğan: Famous US economist Arthur Laffer
Turkey's economy has been doing well, especially if you compare it to the U.S.', said a world-famous American economist in Ankara Thursday. "The things done in Turkey, about tax issues and privatization, really deserve praise. If you proceed like that, your prosperity level will significantly increase," Laffer told reporters ahead of a seminar titled "Fiscal Policy: The Foundation of Turkey's Macroeconomic Success," organized by the Foreign Economic Relations Board (DEIK). "I am very optimistic about Turkey. In the short term however, I would like to propose a deal. I would trade Obama for Erdoğan. One of my friends said, 'If you can just switch the presidents it would be great'," said Arthur Laffer, referring to Turkish President Recep Tayyip Erdoğan and his U.S. counterpart Barack Obama. "Turkey's economy is doing extraordinarily well compared to rest of the world. If you want to see a bad economy come to the U.S., and see how we ruined the economy. Over the last 15 years, W. [George W. Bush] and Obama have done a horrible job. This has proved that you can't tax an economy into prosperity," added Laffer. Laffer, a former economic advisor to U.S. President Ronald Reagan and a champion of “supply-side" economics, outlined five points for healthy economies. "There are five things that countries must do to create prosperity. First comes the tax system. All taxes are bad, but some are worse than others. Secondly, restrain government spending, which actually means taxation. Governments don't create resources, they redistribute resources. "The third is sound money. There is nothing that can bring an economy to its knees quicker than unsound, unbacked money. "Next is free trade. There is nothing more important for an economy than free trade. China is the U.S.' best friend, not the enemy. Because without China there is no Walmart. "Last comes minimal regulations. Governments are not the solution, they are, in most countries, the problem. They should get out of the way," claimed Laffer. Laffer has been lauded by conservative politicians and economists for his theories and the so-called “Laffer curve" on the effects of government taxation.
Istanbul Finance Summit debates Turkish economy, Europe
The Turkish economy's resilience and the future of Europe were discussed on the second day of the 7th International Finance Summit in Istanbul on Wednesday. Ryszard Czarnecki, vice president of the European Parliament said: "Turkey, indeed, has been recording substantial developments in politics, the economy and finance. Turkey's aim to take place among the top 10 economies of the world in 2023 is challenging but also possible. "Turkey has a great advantage with the potential of its fast-growing population," he added. Acting Deputy Undersecretary of Turkey's Ministry of Development Hayri Maraslioglu said the country's mega infrastructure projects provided support not only to domestic business but also international trade. Praising the Turkish economy for passing the “stress test" of the July 15 coup bid, Maraslioglu added: "It is important to be able to finance investment projects with domestic sources. Therefore, savings should be increased and directed to the long-term instruments." Acting Deputy Undersecretary of Turkey's Treasury Hayrettin Demircan discussed the official search for new kinds of “sukuk" -- a financial certificate offered as an Islamic bond -- in order to enrich investment funds.Turkey can soon be regional energy hub: ex Shell chief "Turkey's sovereign wealth fund legislation was approved by the parliament. This fund is expected to be used as an instrument to finance investment projects, but this will become clear in time," said Demircan. Vedat Akgiray, former head of the Capital Markets Board of Turkey and a professor at Bogazici University, criticized international credit agencies, saying: "If the things that Turkey has met since 2013 happened somewhere else, the consequences would be very traumatic for those countries. “However Turkey's economy, with its business and banking sector, stayed solid. “An economy not sinking through such troubles deserves nothing less than the AAA credit rating," he said. Klaus Kirchhoff, CEO at Kirchhoff Consult AG said: "A lot of investors still want to invest in Turkey, but they want more stability. These investors have money in their pockets and show great interest in Turkey. “I know there is no such potential in the other European countries. So, political stability is important. “Providing a reconciliation environment in Turkey is needed more than ever … maintaining peace is to everyone's benefit as well," Cornelia Meyer, chair of the London office of LBV Asset Management, said. Nesrin Sirvan, business development director of JCR Eurasia Ratings, said Turkey featured in many countries' middle- and long-term plans: “Turkey's most significant advantage is its geopolitical position... It is located close to developed industries such as Europe and the country helps their industries to be improved," said Sirvan.Refugee crisis, Europe's future On the refugee crisis, Czarnecki said: "We need an intense collaboration with both Turkey and the other neighboring countries as this crisis continues. “In fact, there is a strong necessity for a significant agreement, instead of dialogue, among the partners both inside and outside the EU." About the future of the EU, Czarnecki stated he believed Brexit, which would be very damaging for the EU, would not be actualized. Stressing dissolution of EU was a strong assumption, Sant Manukyan, head of Investment International Markets Department with Turkish lender Is Bank, said that a “hit-the-wall effect" will eventually occur in the global economy. "European countries will have to deal with Syrian immigrant crises more carefully in the upcoming period. The immigrant process coincided with a time when Europe's economy was deteriorated and its reflection has started to be seen with Brexit," said Manukyan. *Muhammed Ali Gurtas and Tuba Sahin contributed to this report from Ankara