Turkey’s industrial output rise signals GDP growth

ISTANBUL - Hürriyet Daily News

Daily News Photo, Emrah Gürel

Turkey has reported stronger industrial production data in June, signaling greater economic growth for the period.

The country’s industrial output in June expanded a seasonally and calendar-adjusted 1.4 percent compared with May, the Turkish Statistical Institute (TÜİK) said Aug. 12. The seasonally adjusted, raw, industrial output rose 4.2 percent, TÜİK also said. The June data beat the average non-adjusted growth forecast, which was around 2 percent.

With the momentum of June acceleration, the second quarter production growth reached 3.2 percent compared to the same period last year.

In a statement released after announcement of data, Turkish Economy Zafer Çağlayan said Turkey’s growth may be slightly over 3 percent at the year-end.

“Now, we have more clear estimations for the second quarter growth, therefore 2013 growth. It looks like overall year growth may be slight above 3 percent,” he said, reminding it’s below the government’s Medium Term Program targets.

Last week, Deputy Prime Minister Ali Babacan had said Turkey might slash its growth rate target to below 4 percent and its annual export target to below $158 billion, mainly due to global economic fluctuations.

Analysts comments on the June data wer in line with the minister’s.

“While it has been officially recorded that industrial production has been stronger in the second quarter than the first quarter when it posted a limited 1.3 percent rise, it also gave positive signals for the national income growth for the same period,” Burgan Investment chief economist Haluk Bürümcekçi told Anadolu agency.

“The GDP growth was around 3 percent in the first quarter and it could be said that industrial production data points at 3.5 percent growth in the second quarter,” he said.

The rebound in the second quarter was proven with quantities, but some key indicators – PMI, consumer and private sector confidence indexes and power generation – are implying that the country is having a hard time maintaining its good condition in the third quarter, Bürümekçi noted.

Markit’s Purchasing Managers’ Index (PMI) data for Turkey that was announced early August also revealed that the manufacturing sector contracted in July for the first time in a year.

Turkish exporters managed to raise their sales abroad by 0.6 percent in June, but six-month export data showed that this year’s growth is still far from previous years’ impressive levels.