Turkey industry output dives, fuelling fears on growth

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ISTANBUL: Turkey’s industrial output nosedived in September, the country’s statistics office said, fuelling fears that growth is contracting in the second half of the year in the wake of the failed July 15 coup.

Industrial production adjusted for working days fell 3.1 percent in September 2016 from September last year, Turkstat said in its latest release.

Adjusted for working days and seasonal effects, it fell 3.8 percent from August and 4.1 percent from September last year, it added.

The robustness of the Turkish economy despite the numerous crises besetting the region has always been a key pillar of President Recep Tayyip Erdogan’s popularity.


But with the coup bid rattling investors and terror attacks torpedoing tourism this year, the government has already snipped its 2016 full year growth forecast to 3.2 percent.

“It is clear that 15 July failed coup attempt and its aftermath had a serious impact on production,” said Ozgur Altug, chief economist at BGC Partners in Istanbul.

He said growth for the third quarter “might be in negative territory” and while the government was seeing recovery signs in the fourth quarter “we should admit that they are not strong”.

Gokce Celik, chief economist at QNB Finansbank, said that the poor third quarter will hit full year growth and was cutting the forecast for full year growth to 2.1 percent from 3 percent.

Analysts said that the September plunge was however partially due to the surge in August, where industrial production rose 8.8 percent month-on-month as workers raced to make up for lost time in the wake of the coup.

William Jackson, chief emerging markets economist at Capital Economics in London, said survey data had also shown improvement but the “underlying trend in the economy is clearly one of weakness”.

“It seems highly likely that overall GDP contracted in quarter-on-quarter terms in Q3,” he said.

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