Turkey's industrial production grows 9.9% y/y in February

Turkey's industrial production grows 9.9% y/y in February
By bne IntelliNews April 16, 2018

Turkey’s calendar-adjusted industrial production index gained 9.9% y/y in February, slowing for the second consecutive month, data from national statistics office TUIK showed on April 16. A 13.7% y/y rise was posted in December and a 12% y/y increase was registered in January.

Industrial production in Turkey has now stayed in annual growth territory for an uninterrupted 16 months from October 2016 to February 2018. It peaked with a 14.7% gain seen last July.

Average annual industrial production growth quickened to 8.9% in 2017 from 3.4% in 2016, according to TUIK’s revised series of data. The previous data set pointed to average annual industrial production growth of 6.3% in 2017 and 1.8% in 2016.

Turkey’s manufacturing boom has been substantially founded on the government's TRY250bn (€60.8bn) credit guarantee fund (CGF) for backstopping bank loans to businesses. Following the failed coup of July 2016 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.

The Turkish government is expected to soon announce a fresh stimulation package for 2018. As part of the expected package, Turkish President Recep Tayyip Erdogan and the government announced last week a total of around TRY135bn worth of investment incentives for 19 industrial producers’ 23 long-term investment projects.

Fears that Turkey’s economy is overheating intensified on March 29 as 4Q GDP growth for last year came in at 7.3% y/y with the full-year 2017 expansion given as 7.4% after 3Q GDP was revised up 0.2pp to 11.3%.

The Turkish government is targeting annual GDP growth of 5% from 2017 to 2020.

Turkey’s Manufacturing Purchasing Managers' Index (PMI) edged down from 55.6 in February to 51.8 in March, the lowest level recorded since April 2017.

Data

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