Turkey’s calendar-adjusted industrial production index gained 8.7% y/y in December, accelerating from the 7% y/y rise recorded in the previous month, data from national statistics office TUIK showed on February 8.
Industrial production in Turkey has stayed in annual growth territory for 15 months, peaking at 14.5% last July. Average annual industrial production growth escalated to 6.3% in 2017 from 1.8% in 2016.
Turkey’s manufacturing boom has very much been founded on the government's TRY250bn ($53bn) credit guarantee fund (CGF) for backstopping bank loans to businesses. Following the failed coup and the brake it put on economic growth, Turkey spurred the economy by upping spending across the board, hiking wages, pouring capital into investments and guaranteeing loans with the CGF.
Turkey’s GDP growth accelerated to 11% y/y in the third quarter of 2017 from 5.3% in Q1 and 5.4% in Q2.
The Turkish economy probably grew 6.5% in 2017 and it is expected to grow by 4% in 2018, a Reuters poll of 43 economists showed last month.
The Turkish government is targeting GDP growth of 5% from 2017 to 2020.
The World Bank has raised its GDP growth forecast for the Turkish economy to 6.7% for 2017 from its previous forecast of 4%. The international financial institution, however, cut its 2018 growth projection by 0.4 percentage points to 3.5% for 2018, according to its latest Global Economic Prospects report, published on January 10.
“The significant rebound in Turkey’s growth last year—to 6.7 percent, from 3.2 percent in 2016— was supported by fiscal stimulus aimed at expediting recovery from the economic repercussions of the 2016 failed coup attempt. Export growth also rose on the back of strengthening demand from the European Union and competitiveness gains from the 2016 currency depreciation,” the World Bank said.
In October, the International Monetary Fund (IMF) revised up its 2017 growth forecast for the Turkish economy to 5.1% from the 2.5% anticipated in April.