According to calendar adjusted data, Turkey’s industrial production in August increased by 10.4% compared to the same month of the previous year; Seasonal and calendar adjusted industrial production, on the other hand, increased by 3.4% compared to the previous month. According to the unadjusted data, there was a 16% increase in industrial production compared to the same period of the previous year.
In August, we are seeing slightly higher industrial production growth rates than we expected. We expected an increase of 8% in the calendar adjusted index and 10.9% in the unadjusted index on an annual basis. The lack of workday in August is effective in the positive separation of unadjusted data. Industrial production has been recovering since May, so we see industrial production indices rising above pre-pandemic levels. On the one hand, increasing economic activity by loosening partial closures has been effective in the rapid recovery that has taken place since May, on the other hand, the economic measures taken are effective in this. During the 3Q20 period, the monetary policy was kept loose to support economic growth and the regulations enabled the loan growth to accelerate. On the fiscal policy side, the recovery of company activities has been supported with government incentives. Industrial production data from July and August indicate that the 3Q20 period will point to a strong recovery.
Looking at the details; Mining and quarrying increased by 2.5% on a monthly basis and increased by 5.2% on an annual basis. While the manufacturing industry increased by 3.6% on a monthly basis, an annual growth of 11.4% was realized. In the electricity, gas and steam group, an increase of 1.3% was observed on a monthly basis, while the increase was at the level of 2.3% on an annual basis. On a monthly basis, while intermediate goods increased by 4.8%, capital goods by 3.7%, non-durable consumer goods by 2.8% and energy by 1.6%, durable consumer goods contracted by 4.6%. Considering the annual changes in the related items; Intermediate goods increased by 13.6%, durable consumer goods by 12.6%, capital goods by 10.3% and non-durable consumer goods by 9.1%, while energy contracted by 0.8%.
Although strong data in July and August indicate that economic growth will be strong in 3Q20, the first signs of slowdown will begin to be seen in September. After August, we will see the effects of tightening measures in monetary policy, increasing interest rates and applying slow down on loans together with the new policies implemented. Therefore, just as there was a rapid recovery in the 3Q20 period, we will see a slight slowdown in the 4Q20 period.
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