Turkey's industrial production growth slows to 7% y/y in November

Turkey's industrial production growth slows to 7% y/y in November
By bne IntelliNews January 8, 2018

Turkey’s calendar-adjusted industrial production index gained 7% y/y in November, decelerating from the 7.4% y/y rise recorded in the previous month, data from national statistics office TUIK showed on January 8.

Industrial production contracted 4.3% y/y in July 2016 due to the disturbance caused by the failed coup attempt, but output has stayed in annual growth territory since then, peaking at 14.5% in July 2017.

Turkey’s manufacturing boom has very much been founded on the government's TRY250bn ($66.8bn) 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.

"The sharp pick-up in Turkish GDP growth in Q3, to a six-year high of 11.1% y/y, flattered by comparison with Q3 of last year, when output was disrupted by the coup attempt. The annual rate of growth is likely to slow sharply in the coming quarters,” Capital Economics said last month, commenting on the latest GDP data release.

The big driver behind Q3 growth was final consumption expenditure by resident households, which grew 11.7% from a year earlier.