FILE PHOTO: Workers produce face masks as the demand for their production rapidly increased and struggles to meet orders, at a Turkish manufacturer’s facility in Istanbul, Turkey, January 30, 2020. REUTERS/Umit Bektas
ANKARA (Reuters) – Turkey’s industrial production index is expected to have expanded 2.45% year-on-year in January, a Reuters poll showed on Tuesday, returning to growth after two months of contraction.
Industrial activity had bounced back strongly after the initial coronavirus wave in April 2020 and expanded for more than two years straight.
But annual growth slowed significantly since the summer, with demand declining due to the wider global slowdown. While the index is expected to have expanded in January, the major earthquakes that hit the country’s south in February are likely to impact subsequent growth.
The median estimate in the Reuters poll of six institutions showed a year-on-year expansion of 2.45% in the calendar-adjusted industrial production index in January.
The estimates ranged between 1.90% and 3.50%.
In November, the index contracted 1.3% year-on-year, for the first time since 2020, and another 0.2% in December.
President Tayyip Erdogan’s economic programme prioritises growth, exports, investments and employment while lowering interest rates.
The central bank cut its policy rate by 550 basis points since August, to 8.5%, in line with Erdogan’s unorthodox policy despite soaring inflation.
It justified the cuts by saying financial conditions must remain supportive to maintain industrial production growth. It cited the need for more stimulus in the face of the earthquakes when it cut again last month.
The Turkish Statistical Institute will announce January industrial production figures at 0700 GMT on March 10.