The industrial production in Turkey is expected to have expanded 9.7% annually in January, rising for a 19th consecutive month, according to a survey on Tuesday.
But activity is estimated to have cooled from the previous month due to disruptions to some utilities, according to the Reuters poll.
Month on month, factory production is expected to have slightly contracted due to electricity and natural gas cuts at industrial facilities stemming from a technical failure in Iran.
Year-on-year growth, however, has remained positive since coronavirus measures were eased in 2020.
The median estimate in the Reuters poll of seven institutions showed growth of 9.7% in the calendar-adjusted industrial production index in January. Forecasts ranged between 7.0% and 12.1%.
Enver Erkan, a chief economist at Tera Yatırım, said the natural gas and power cuts at the end of January may have led to a contraction or slowdown in industrial production.
He added that a potential input supply issue due to Russia’s invasion of Ukraine, and rising production costs, could slow things more.
"If there is a reduction in external demand, this could impact production through exports. If there is a supply chain disruption due to war after February, this could impact industrial production with both price increases and a lack of goods in the market," he said.
Erkan added that he expects the pace of growth in the index to slow down to single digits as of March and approach neutral towards summer.
In April of 2020, output dropped more than 31% in the face of the initial coronavirus wave. It has since made a strong recovery because subsequent measures largely skirted the manufacturing sector, and most remaining restrictions were lifted in July of last year.
Turkey’s economy bounced back from the COVID-19 pandemic to grow 11% last year, its highest rate in a decade. The gross domestic product (GDP) grew 9.1% year-over-year in the fourth quarter.
But a depreciation in the Turkish lira sent inflation soaring via import prices. The inflation jumped to 54% in February, while the fallout from Russia’s invasion of Ukraine is also clouding the outlook.
The Turkish Statistical Institute (TurkStat) will announce January industrial production figures on Friday.