January industry rise fastest of 27 months

ANKARA

Turkish industrial production has surged with highest pace of 27 months. AA photo

Turkey’s industrial production in January outpaced market expectations by rising 7.3 percent on an annual basis and recording the fastest increase in 27 months, official data has shown.

According to figures released by the Turkish Statistical Institute (TÜİK), the industrial production index has reached its highest level since October 2011, rising above expectations that were hovering between 4 and 5 percent.

Both the capital and intermediate goods industries have recorded strong increases throughout the month, indicating a firm investment environment.

“Annual increases in intermediate and capital goods production, which are important indicators of investments, of around 9 percent are notably surprising,” said Garanti Investment Chief Economist Gizem Öztok Altınsaç.

She said the figures regarded as indicators for growth were giving mixed messages.

“Particularly, this latest industrial production data is remarkably higher than expectations. It is very surprising that such an important growth indicator came this strong while there is a slowdown in loans and the consumption and capital inflow slowdown is continuing,” she said.

However, analysts warn that the strong data may be driven by the predated demand of consumers who have been afraid of the installment payment restrictions that took effect on Feb. 1.

The Banking Regulation and Supervision Agency (BDDK) has launched new measures to curb consumer loans and the use of credit cards to pay for goods through monthly installments, in the hope of restricting the country’s growing inflation and current account deficit.

Therefore, sector representatives and analysts expect to see a U-turn in February industrial production figures.

Compared to the previous month, seasonally and calendar-adjusted industrial production index also rose 1.1 percent.