Turkey’s economy grew by an annual 6 percent in the fourth quarter, rebounding at a faster pace than expected on the back of cheap credit and interest rate cuts.

Economists had expected an economic expansion of 5 percent to 5.1 percent, according to surveys by Reuters and the state-run Anadolu news agency.

The economy grew by 0.9 percent in the whole of 2019 after annual contractions in the first half of the year, according to figures published by the Turkish Statistical Institute on Friday. Economic output in Turkey is now worth $753.7 billion.

Turkey’s government is seeking to spur economic activity after a currency crisis erupted in the summer of 2018, which sent consumer and business confidence plummeting. The central bank is giving strong backing to the political leadership – it has slashed interest rates to 10.75 percent from 24 percent six months ago. Inflation stands at 12.2 percent.

The expansion in the fourth quarter was led by consumer spending, which jumped by 6.8 percent. The uptick in spending is being fuelled by lending by state-run banks, which have flooded the market with cheap credit.

The economy grew by 1.9 percent in the fourth quarter compared with the previous three months on a seasonally and calendar-adjusted basis, the institute said.

The government is targeting economic growth of 5 percent this year. But while the economy is reviving, analysts warn that an expansion based on a consumer spending boom may be unsustainable. The currency crisis of 2018 was partly caused by so called economic overheating, which fuelled demand for imports.

Losses for the lira last year meant Turkey's economy contracted in dollar terms in 2019 from $789.6 billion the previous year.

Turkish loans are currently rising at about 25 percent annually, credit ratings agency Fitch said this week.

Turkey’s foreign trade deficit almost doubled in January from the same month a year earlier to $4.45 billion, the statistics institute said in a separate statement. Imports grew by 19 percent to $19.2 billion, accelerating at triple the pace of exports.