Turkish industrial production sees sharp rise, signaling acceleration in economic growth

ANKARA

Turkey’s industrial output soared in April, mainly due to a significant increase in automotive production and a number of measures taken to give a boost to the economy, signaling a visible acceleration in the GDP growth. 

Calendar-adjusted industrial production rose 6.7 percent in April compared to the same month last year, data from the Turkish Statistical Institute (TÜİK) showed on June 8.
     
Industrial production grew 2.3 percent in April from March, the biggest growth since October 2016, when it climbed 4.1 percent.

TÜİK will announce the first quarter GDP growth on June 12. Economists expect growth of around 4 percent, according to Reuters. 

Following a coup attempt last July, the government introduced tax cuts in furniture, home appliances and property sectors and a number of measures to boost employment in a bid to give a rebound to the slowing economy. 

According to İş Investment Economist Muammer Kömürcüoğlu, these measures have helped the economy to speed up. 

“In April, Turkey’s industrial output caught a strong momentum. The seasonally and calendar adjusted industrial production rose 2.3 percent compared to the previous month. This shows a robust recovery in industrial production,” Kömürcüoğlu said, as quoted by Reuters. 

He added that the economic growth would accelerate by the second quarter of this year, and these forecasts were supported by several indicators including the PMI data. 

Turkish manufacturing activity witnessed its strongest overall improvement in May since December 2013, as output, new orders, exports and employment all continued to grow, a business survey showed on June 1.

The manufacturing Purchasing Managers’ Index (PMI) rose to 53.5 in May from April’s 51.7, staying above the 50-point line that separates expansion from contraction, the Istanbul Chamber of Industry (İSO) and IHS Markit stated.

According to TÜİK data, the largest output increase was realized in the sector of other transport equipment, which includes shipbuilding and airplane parts and locomotive production. The sector saw a 140.7 percent of increase in production, followed by the manufacture of computer, electronic and optical products by 19.5 percent and the manufacture of basic pharmaceutical products and pharmaceutical preparations by 6.9 percent in April 2017, compared with previous month.

According to calculations, the largest contribution to the industrial output growth was made by the automotive sector and the home appliances sector. 

A number of international organizations have recently hiked their forecasts about Turkey’s 2017 economic growth, including the World Bank and the OECD, revising up their forecasts to 3.5 percent and 3.4 percent respectively.