Turkey | Still robust activity in 4Q

Summary

Industrial Production (IP) increased by 8.5% yoy in calendar adjusted term(5.4% yoy in raw series), in line with the market expectation in October. 2021 GDP growth will likely reach 10.5-11%, beating our current 9.5% GDP growth forecast.

Key points

• Key points:
• IP still doesn’t indicate a clear slowdown in economic activity given the slight recovery in monthly growth of 0.6% which was a -1.5% previous month.
• All the main subsectors except capital goods gave a positive contribution whereas the capital goods had a strong deterioration in the same way it did previous month.
• Our Big Data demand proxies and other high frequency indicators still displayed solid momentum in November and December. Hence, our monthly GDP indicator nowcasts a yearly growth rate of 8.1% for November (52% of info) and 8.5% yoy for December (33% of info), indicating a quarterly growth rate of 2% for 4Q.
• Current strong momentum, looser economic policies, remaining robust global activity would support the economy. However the latest currency shock , uncertainties tied to new Covid-19 variant and tighter financial conditions will likely be downside factors on 2022 GDP growth.

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