Capacity utilization rises to 72.7 percent

Bloomberg

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Manufacturers used 72.7 percent of their capacity compared with 70.4 percent in May, the statistics office in Ankara said on its Web site Friday. Capacity utilization was expected to rise to 74 percent, according to the median estimate of six economists surveyed by Bloomberg. The fourth consecutive month of growing capacity usage follows government cuts to taxes on new cars and home appliances designed to preserve jobs and accelerate economic recovery. The economy contracted 13.8 percent in the first quarter of the year, the most since records began in 1987.

"It’s a weak increase and it’s clear that the recovery is going to be slow," said Mert Yıldız, an economist for ING Bank in Istanbul. "This will probably support further rate cuts."

Central Bank Governor Durmuş Yılmaz has already slashed 8 percentage points from the rate in as many months and said on June 16 that the easing would continue unless the Bank sees clear signs of recovery. The Bank next meets to set the benchmark rate on July 16.