Turkish industrial production rose for the second month in a row in October after a year of declines as the economy recovers from recession, though the expansion in output from a year earlier was lower than expected at 3.8%, official data showed yesterday.
Industrial output was expected to have risen 6.2% annually in October on a calendar-adjusted basis, according to a Reuters poll.
The lira weakened slightly to 5.7875 against the dollar at 0843 GMT from 5.7780 before the data was released.
After three consecutive quarters of year-on-year contraction, Turkey’s economy grew 0.9% in the third quarter, shaking off a recession which followed a currency crisis last year when the lira lost nearly 30% of its value.
Industrial production, widely regarded as an indicator of broader Turkish growth, rose a revised 3.6% in September after 12 months of contraction.
The production increase in September had previously been given as 3.4%.
“Thanks to the recent increase in credit growth, it seems that industrial production will increase in the coming period as well,” said Yatirim Finansman economist Hilmi Yavas.
“This is supported by the fact that there are no negative developments in exports.”
On a month-on-month basis, industrial production fell 0.9% in October on a calendar and seasonally adjusted basis, the Turkish Statistical Institute (TUIK) said. Month-on-month growth will likely return in the coming months as the data is always volatile, Yavas said, adding that the lower-than-expected industrial output in October did not point to a negative outlook for growth.
Turkey’s central bank has slashed interest rates in recent months to revive the economy, most recently cutting its policy rate by 200 basis points to 12% on Thursday.
The key rate had stood at 24% in July.
The data showed the manufacturing index rose 3.7% year-on-year in October, while mining and quarrying increased 6.5%, TUIK said.
Manufacturing output fell 1.1% from a month earlier.
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