Turkey: Industrial Production still robust before currency shock - BBVA

Matías Salord FXStreet

Industrial Production (IP) in Turkey increased by 8.5% in October from a year earlier, in line with consensus. Analysts at BBVA point out GDP growth in 2021 will be around 10.5-11%, above their current forecast of 9.5%. All these took place before the recent devaluation of the lira.

Key Quotes:

“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.”

“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.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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