Istanbul: Turkey’s economy grew a higher-than-expected 4.0 per cent year-on-year in the third quarter, official data showed on Thursday, in a boost to the government after expectations of a second-half growth slowdown.

Deputy Prime Minister Mehmet Simsek, who is in charge of the economy, said the growth was driven by private sector demand and forecast that next year would be “much better” as reforms are enacted and growth potential increases.

The growth exceeded a Reuters poll forecast of 2.8 per cent and outstripped expansion of 3.8 per cent in the second quarter.

The ruling AK Party founded by President Tayyip Erdogan won a convincing victory in a Nov. 1 parliamentary election, winning back the single-party rule it had lost in June and reducing political uncertainty.

The lira, which has lost around 20 per cent of its value against the dollar this year, firmed to 2.9127 from 2.1975 before the data. The main share index rose 0.53 per cent.

Output grew 1.3 per cent from the previous quarter on a seasonal and calendar-adjusted basis, the Turkish Statistics Institute data showed.

There was also a mildly positive surprise on the current account deficit, generally a weak spot of the economy, which came out at $133 million in October, below an expected $200 million.