Turkish industrial output rises for second month in a row in October

ISTANBUL: Turkish industrial production rose for the second month in a row in October after a year of declines as the economy recovers from recession, though the expansion in output from a year earlier was lower than expected at 3.8 per cent, official data showed on Friday.

Industrial output was expected to have risen 6.2 per cent annually in October on a calendar-adjusted basis, according to a Reuters poll. The lira weakened slightly to 5.7875 against the dollar at 0843 GMT from 5.7780 before the data was released.

After three consecutive quarters of year-on-year contraction, Turkey’s economy grew 0.9 per cent in the third quarter, shaking off a recession which followed a currency crisis last year when the lira lost nearly 30 per cent of its value.

Industrial production, widely regarded as an indicator of broader Turkish growth, rose a revised 3.6 per cent in September after 12 months of contraction. The production increase in September had previously been given as 3.4 per cent.

“Thanks to the recent increase in credit growth, it seems that industrial production will increase in the coming period as well,” said Yatirim Finansman economist Hilmi Yavas.

“This is supported by the fact that there are no negative developments in exports.” On a month-on-month basis, industrial production fell 0.9 per cent in October on a calendar and seasonally adjusted basis, the Turkish Statistical Institute (TUIK) said.

Month-on-month growth will likely return in the coming months as the data is always volatile, Yavas said, adding that the lower-than-expected industrial output in October did not point to a negative outlook for growth.

Turkey’s central bank has slashed interest rates in recent months to revive the economy, most recently cutting its policy rate by 200 basis points to 12 per cent on Thursday. The key rate had stood at 24 per cent in July.

The data showed the manufacturing index rose 3.7 per cent year-on-year in October, while mining and quarrying increased 6.5 per cent, TUIK said. Manufacturing output fell 1.1 per cent from a month earlier.