Turkey Industry Output Suggests Growth Above 3%

Turkey’s industrial production expanded in July at the fastest pace in more than a year, and Economy Minister Zafer Caglayan said the figures show the economy may grow more than 3 percent this year.

Industrial growth on a workday-adjusted basis rose 4.6 percent in July from a year ago, the fastest pace since May 2012 year, the state statistics agency in Ankara said today on its website. Output rose 0.9 percent on the month on a workday and seasonally adjusted basis, according to official data.

Turkey’s economy grew at the slowest pace since the 2009 recession last year. Obstacles to growth this year include a plunge in the lira and government bonds, as emerging-market assets declined on expectations the U.S. will start withdrawing monetary stimulus, and the conflict in neighboring Syria.

“Although the industrial output increased more than expectations and suggests a strong start for the third quarter, considering the loss of value in Turkish lira, we think the production will slow in the period ahead,” Ali Cakiroglu, a strategist at HSBC Asset Management, said in an e-mailed note today.

The lira gained 0.5 percent to 2.0398 per dollar at 11 a.m. in Istanbul. Yields on benchmark two-year notes were down 9 basis points, or 0.09 percentage point, to 9.37 percent, according to data compiled by Bloomberg.

“If today’s better-than-expected data continues in August and September, then we may see a better figure in the third quarter,” Caglayan said in reference to economic growth, predicting the full-year figure will be “a bit over 3 percent.”

That falls short of the government’s year-end growth target of 4 percent.

(Corrects direction of lira move in fifth paragraph.)
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