Turkey | Still not a clear deceleration in activity

Summary

Industrial Production grew by 66% YoY in cal. adj. terms in April, boosted by base effects. Despite the 0.9% MoM contraction, the slow down isn't clear, given strong momentum so far and upward revisions in global growth reinforce upside risks for our prudent 2021 GDP growth forecast of 5%.

Key points

• Key points:
• Season. and cal. adjusted IP contracted by 0.9% mom in April, led by intermediate (-2%) and consumption goods (-1.6%) while capital (+2.1%) and energy (+0.4%) goods production remained supportive
• April figures implied some correction due to the lock-down measures but once the economy reopened in mid-May, the slow-down still isn't clear in 2Q as our high frequency indicators have confirmed.
• Our monthly GDP indicator nowcasts a YoY growth rate of near 24% as of early June (33% info), reflecting still a moderate positive QoQ growth for 2Q.
• Despite tighter financial conditions, partially continuing lockdown measures and downside risks on tourism revenues, yearly GDP growth might reach near 15% in 1H21 due to still strong domestic demand and some recovery in external demand.
• Sizable carry-over impact fed by the current solid momentum and expected further pick-up in global economic activity put clear upside risks on our prudent GDP forecast of 5% for 2021.

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