A significant gauge of the economic growth trend, industrial output registered a 3.4% rise in September for the first time in 13 months, signaling a modest improvement in third-quarter growth data
Turkey's industrial output improved in September on an annual basis, with all subindexes seeing an increase, according to official data released Thursday. A report from the Turkish Statistical Institute (TurkStat) showed that Turkey's calendar-adjusted industrial production soared 3.4% in September year-on-year. The figure rose on an annual basis for the first time since August 2018 and hit its highest level of the last 13 months. The annual and monthly rise in industrial production signaled that the Turkish economy has entered a period of expansion. Commenting on the industrial production data on his Twitter account, Industry and Technology Minister Mustafa Varank said, “The preliminary indicators of growth revive." Varank said the annual and monthly developments in the production of capital and intermediate goods gives a better signal for rises in future production. He also recalled that the Purchasing Manufacturers Index (PMI), capacity utilization rate and economic confidence index were also up in September. Manufacturing operating conditions in Turkey showed recovery in September thanks to growth in new orders, according to IHM Markit data. Turkey's PMI for the manufacturing sector reached 50 – the threshold for the growth indicators. Turkey's economic confidence index stood at 86 in September on a monthly basis. The mining and quarrying index posted the largest rise in September, up 5.7% from the same month last year. The manufacturing index climbed by 3.4%, while the electricity, gas, steam and air conditioning supply index went up by 0.4% in the same period. On a monthly basis, industrial production rose by 3.2% in September. The mining and quarrying and manufacturing indexes advanced by 7.5% and 3.3%, respectively. The electricity, gas, steam and air conditioning supply index slipped by 1.4% in September, compared with the previous month. The index showed that the economic gross domestic product (GDP) has seen limited improvement in the third quarter of the year. The industrial production dropped 3.6% year-on-year in August, while it decreased by 1.2% in July on an annual basis. The industrial output posted a 4.3% rise month-to-month in July. The extent to which the growth tendency will get stronger in the third quarter and in the first half of 2020 will depend on the financial conditions and the credit expansion trend of banks. Moreover, the external demand for Turkish products, namely the country’s exports, will also play a key role in the growth dynamics in the upcoming period. According to the New Economic Program (NEP), which Treasury and Finance Minister Berat Albayrak unveiled in late September, the Turkish economy is expected to register a 5% growth. While some economists estimate that the Turkish economy will grow 2.5% next year, some of the forecasts point to a 4% expansion of Turkish gross domestic product (GDP). The GDP growth forecast for 2021 was unchanged at 5%, with 2022 also seen at that level, which would return Turkey's economy to its average growth rate in recent years. The Treasury and Finance Ministry expects 0.5% growth in the Turkish economy this year – in line with International Monetary Fund (IMF) forecasts.
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