Turkey’s economy grew a surprising 4.3% in the first quarter of the year, beating the projections of the International Monetary Fund and the World Bank — 2.3% and 2.4%, respectively — and outpacing European Union countries, whose economies grew an average of 0.3%.

Prime Minister Recep Tayyip Erdogan was in a triumphant mood after the rate was announced last week. “At a time when many economies shrink or grow only minimally, Turkey’s growth rate in the first quarter has shown the whole world that its economy is an outstanding one,” Erdogan said. “When calculated retroactively on the basis of the first-quarter growth rate, our 12-month national income has reached 1.614 trillion Turkish lira. We have achieved a new record in Republican history in terms of Turkish lira.”

The growth rate Erdogan boasted of owes much to the financial sector, which he has often slammed as an “interest-rate lobby.” Finance and insurance services expanded a record 13.9% in the first quarter, translating to a 1.7-point contribution to the 4.3% growth rate. This means that about 40% of Turkey’s first-quarter growth was generated by the “interest-rate lobby.”

Growth without investment