Turkey: Industrial production contracts in January in annual terms, but sequential data paints a slightly more positive picture

Industrial output dropped 7.3% in January in calendar-adjusted year-on-year terms. This followed December’s revised 10.0% contraction (previously reported: -9.8% yoy). The marked downturn came on the back of decreased output in the manufacturing; mining and quarrying; and electricity, gas and steam subsectors. Annual average growth in industrial production eased to 0.2% in January from 1.8% in December.

More positively, on a seasonally- and calendar-adjusted basis, industrial production rose 1.0% in January over the prior month, contrasting December’s 1.3% contraction and marking the first month-on-month gain since July 2018. This is likely a sign that activity is finally bottoming out after the industrial sector took a severe blow following last year’s currency crisis.

Turkey Industrial Production Forecast

The industrial sector should gradually recover this year thanks to recent government stimulus measures, improved sentiment and a likely loosening of financial conditions, although year-on-year figures will be depressed by a tough base effect in H1. FocusEconomics Consensus Forecast panelists expect industrial production to decline 0.2% in 2019 and expand 3.1% in 2020.