Increased spending before limits on credit card use took effect probably contributed to the higher-than-expected rise in industrial production in January, according to Turkiye Garanti Bankasi AS in Istanbul.
Industrial output rose 7.3 percent in January from a year ago, more than the average estimate of 4.1 percent in a Bloomberg survey of seven economists. The rise was the highest since October 2011 and driven by manufacturing of intermediate and consumer goods, according to a statement by the state statistics office in Ankara.
The better-than-expected production data was partly due to consumers shopping more before restrictions on credit cards went into effect Feb. 1, Nihan Ziya Erdem, an Istanbul-based economist at Garanti, said by phone. The government-backed curbs limit credit card repayments to nine months and ban installment purchases of mobile phones, jewelry, food and gasoline purchases to narrow the current account deficit, one of the Turkish economy’s main vulnerabilities.
“We were expecting positive January data on the back of credit card measures that went into effect in February,” Erdem said. “January figures may still not be representative of the rest of the year. New regulations may have begun to slow down growth in the economy starting from last month.”
Forecasts for Turkey’s economic growth have been downgraded since December, when news emerged of an investigation into alleged government corruption. Gross domestic product is expected to expand by 2.4 percent this year, according to a Bloomberg survey last month, down from the median forecast of 3.6 percent in a December survey.
The Turkish central bank raised rates after an emergency meeting Jan. 28 to counter a run on the lira, which had weakened by more than 11 percent against the dollar on the corruption probe.