The contraction in the April to June period eased to an annual 1.5 percent from 2.4 percent in the first quarter.
The decline was led by gross fixed capital formation, which slumped by 23 percent, according to data published by the Turkish Statistical Institute on Monday.
Household consumption dropped 1.1 percent, while government final consumption expenditure rose by 3.3 percent.
The economy was expected to contract by 2 percent, according to the median estimate of 18 economists in a Reuters survey published last week.
Turkey’s government has drawn on emergency funds from the central bank to fund spending, introduced tax cuts and sanctioned a flood of cheap lending from state-run banks to help revive economic growth.
The lira dropped to a record low last August, sparking a recession and a surge in non-performing loans and bankruptcies.
The economy grew 1.2 percent on a quarterly basis following a 1.3 percent expansion in the first quarter.
The lira was trading up 0.3 percent at 5.81 per dollar in late morning trading in Istanbul, little changed from earlier in the day. The currency has weakened almost 10 percent this year.