Türkiye: A negative surprise in activity – BBVA

Matías Salord FXStreet

Analysts at the Research Department at BBVA explained that Industrial Production in Türkiye grew by just 0.4% in September below the 3% expected. They forecast a GDP growth rate at near 5.5% during 2022.

Key Quotes:

“In seasonal and calendar adjusted series, IP declined in September (-1.6% m/m) on the back of a broad-based deterioration in subcomponents. The slowdown in industrial activity was more pronounced in quarterly terms with IP contracting by 4.1% in 3Q (vs. 0.8% in 2Q), led by the intermediate goods production contributing 2.2pp to the decline. This was followed by consumer goods (mainly non-durables), capital and energy goods, respectively.”

“According to our nowcasts, GDP growth has started to decelerate more clearly as of 3Q and the slow-down has started to become much faster than expected with 4Q early indicators. The political priority to maintain pro-growth policies at all costs leads us to expect more countercyclical fiscal measures ahead of the elections in addition to the continuation of ultra-loose monetary policy. Therefore, we expect 2022 GDP growth to reach near 5.5%, which would be followed by a strong pace in the first half of the year with around 5%.”

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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