Bloomberg News

Turkish Industrial Output Fell for Third Month in April

June 08, 2011

(Updates with comments from analyst in fourth paragraph, finance minister in fifth.)

June 8 (Bloomberg) -- Turkish industrial production declined 0.6 percent in April from a month earlier, the third consecutive monthly fall, as the government seeks to ensure a “soft landing” from booming growth.

Output rose 8.4 percent from April 2010 when adjusted for the number of working days, slowing from 10.4 percent in March, according to data published by the government statistics agency in Ankara on its website today. Without adjustment, the annual increase was 8.3 percent, compared with a median forecast of 9.7 percent in a Bloomberg survey of five economists.

The central bank has raised reserve requirements for banks four times since December, seeking to limit the consumer lending that helped drive an 8.9 percent expansion in gross domestic product last year.

The figures counter the argument of “those claiming overheating in Turkey,” and support the central bank’s policy of using reserve requirements to rein in credit growth while keeping the benchmark interest rate at a record low, Tevfik Aksoy, head of emerging market economics at Morgan Stanley in London, said in an e-mailed note.

“From April on there’s been a relative slowdown in the economy,” Finance Minister Mehmet Simsek told CNBC-e television after the data was published. “Monetary policy is effective, and so is the exchange rate. We will do whatever is needed for a soft landing.”

The domestic-demand driven growth is drawing in imports of oil, raw materials and consumer goods, widening the current- account deficit to record levels.

Simsek said the government will take fiscal steps to help limit the deficit. The budget may be close to balancing in the first five months of the year, he said. The government is seeking re-election on June 12.

--Editors: Ben Holland, Karl Maier.

To contact the reporters on this story: Steve Bryant in Ankara at sbryant5@bloomberg.net; Ali Berat Meric in Ankara at americ@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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