Adem Ileri works as an Economist at Garanti BBVA since January, 2018. His main responsibility is making macroeconomic analysis of Turkey.He hold both BA and MSc degrees in Economics from Middle East Technical University (METU), Ankara. Before joining Garanti Bank, he worked as a Research Assistant at METU and as a Specialist in Economic Research Unit at Turk EximBank (Export Credit Bank of Turkey).
Industrial Production grew by 10.4% yoy in cal. adj. terms in August, leading to a fast recovery of near 7% in July-August after the sharp contraction of 17% in 2Q. Despite recent financial tightening, given the strength of the 3Q data and big data at the beginning of 4Q we believe that a 0% GDP growth is now more likely.
Consumer prices increased by 0.86% mom in August, leading the annual inflation to stay almost stable at 11.77%. Annual core inflation rose to 11.03% from 10.25%, reflecting gradual exchange rate pass-thru and the impact of the demand pull factors. We expect the headline inflation to be 11% at the end of 2020.
Turkish economy contracted by -9.9% in yearly terms in 2Q20. The growth rates in services and industry, sensitive to the Covid-19 shock, were the key factors behind. We revise our 2020 GDP growth forecast to -1% from the previous 0%, keeping the same forecast range from -3% to +1%.