Turkey's Industrial Production for October Fails to Meet Market Expectations

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's industrial production in October rose 2.4% from the same month in 2013, according to the country's statistical agency, Turkstat. The increase was below market expectations of a 4% rise.

According to Turkstat, industrial production in October also fell 1.8% from September. Base metals production fell 6%; chemical products fell 2.6%; and textiles fell 0.4%. The negative turn was likely due to due to sales from inventories.

"In spite of the limited improvement in financial conditions, industrial output cut pace on the back of increasing uncertainties regarding global economic outlook," said Inanc Sozer, chief economist of Odea Bank in Istanbul. "Consumer focused sectors have revived modestly, whereas deceleration in production of intermediate goods and capital goods pulled total industrial production down."

"While the print looks weak, we would not read too much into it at this point, given the high volatility of the series and the fact that available 'soft data' appears strong," said Ahmet Akarli, a senior economist at Goldman Sachs (NYSE:GS) in London. "We keep our view that fourth-quarter growth is likely to be strong, but will closely monitor the incoming data."

The International Monetary Fund (IMF) expects the Turkish economy to advance 3% for 2014 and for 2015, while Consumer Price Index (CPI) inflation is envisaged to drop to 7.1% by the end of 2015. In its latest staff report published last month, IMF analysts said they foresee Turkish real gross domestic product (GDP) growth to remain stable at about 3.5% until end-2019.

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