Turkey: Industrial output growth eases in February
Industrial production expanded 7.5% year-on-year in February on a calendar-adjusted basis, slightly down from January’s revised 7.7% increase (previously reported: +7.9% year-on-year). The print reflected a notable drop in mining and quarrying output growth, as manufacturing and energy output rose at a stronger pace compared to January. February’s print benefited from a supportive base effect and likely does not yet fully reflect the impact of the Covid-19 pandemic. Annual average output growth, meanwhile, rose markedly to 1.7% from 0.6% in January.
Furthermore, industrial output rose 1.2% month-on-month on a seasonally- and calendar-adjusted basis, contrasting the 0.2% contraction in January.
A supportive base effect should support the industrial sector this year; however, the balance of risks is tilted to the downside owing to uncertainty over the longevity and severity of the Covid-19 pandemic and the inflation outlook, as the government pursues economic growth fueled by cheap credit. Meanwhile, geopolitical and global trade tensions remain.