Bloomberg News

Turkey February Industrial Production Unexpectedly Rises

April 08, 2013

Turkey’s adjusted industrial production growth rose to 4.4 percent in February, beating expectations and signaling a pickup in economic activity after last year’s slump.

Industrial production rose 1.5 percent over the previous month and 1.7 percent over the previous year when not adjusted for working days, according to figures published by the official statistics agency in Ankara today. The median estimate of five economists in a Bloomberg survey called for a 2.4 percent workday-adjusted expansion.

“The industrial production performance in the first two months of this year seems to draw a better picture than the one observed in the final quarter of 2012,” Gokce Celik, an economist at Finansbank AS in Istanbul, said in an e-mailed report after the data was published today. “The recovery in the domestic demand that started in the final quarter of 2012 has started to be transmitted into economic activity as of the beginning of this year.”

Turkey’s gross domestic product expanded by 1.4 percent in the fourth quarter last year, the slowest pace since 2009, as central bank efforts to cut the current-account deficit depressed domestic demand. The economy grew 2.2 percent in the full year to $786.3 billion, according to data released by the statistics office on April 1.

Economy Minister Zafer Caglayan blamed the central bank for the slump in an interview with CNBC-e today, saying it was late to cut interest rates and support government growth goals. He said Prime Minister Recep Tayyip Erdogan also supported that view.

The central bank should cut its benchmark policy rate as the government targets a 4 percent expansion in GDP this year, Caglayan said.

Yields on benchmark two-year Turkish notes dropped 12 basis points to 5.97 percent at 12:05 p.m. in Istanbul, falling for a fourth day. The lira gained 0.1 percent to 1.7914 against the dollar.

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

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


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