Turkey’s industrial production increase indicates signs of recovery: report

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PHOTO: Dünya

Turkish industrial production expanded 3.4 percent year-on-year in September after contracting for 12 months, government data indicated on Thursday, as the economy shows signs of recovery following last year’s currency crisis, according to Reuters.

In a Reuters poll, the calendar-adjusted industrial output figure was forecast to expand 3.55 percent year-on-year. Month-on-month, industrial production was up 3.2 percent in September on a calendar and seasonally adjusted basis, the Turkish Statistical Institute (TurkStat) said.

Turkey’s economy shrank 1.5 percent in the second quarter after a 2.4 percent drop in the first. Demand has started to pick up as inflation has fallen and as the central bank has slashed rates by 1,000 points since July.

The industrial output index contracted 3.6 percent and 1.1 percent year-on-year in August and July, respectively, according to TurkStat.

The calendar-adjusted industrial production index, a key signal of economic activity, fell 0.4 percent in the third quarter compared to the previous year.

The output rebound “suggests that the economy ended Q3 on a firmer footing and more timely evidence points to a further recovery in the coming months,” said Jason Tuvey of Capital Economics.

“The economy as a whole is likely to record punchy growth rates of 5-6 percent in the coming quarters,” he said.

Meanwhile, international credit ratings agency Moody’s on Thursday upgraded Turkey’s economic growth forecast owing to the country’s growth-friendly fiscal policy, the state-run Anadolu news agency reported.

“Turkey’s recovery is stronger than previously expected, but aggressive stimulus and the US sanctions threat pose risk,” Moody’s said.

The global rating agency revised upward its 2019 and 2020 growth estimates to 0.2 percent and 3 percent, respectively, while holding its projection for 2021 at 3 percent.

Moody’s also expected the global growth to remain sluggish as large engines of economic activity slow down toward a lower long-term trend.

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