Turkish factory activity barely expanded in October: Reuters Poll

ANKARA (Reuters) – Turkey’s industrial production index is expected to have barely expanded in October, a Reuters poll showed on Wednesday, with some economists expecting a contraction as a slowdown in some of Turkey’s main trade partners hit factory activity.

Industrial activity had bounced back strongly after the initial coronavirus wave in April 2020 and has been expanding since then. But annual growth has slowed significantly since the summer, with demand declining due to the wider global slowdown.

The median estimate in the Reuters poll of six institutions showed year-on-year growth of just 0.08% in the calendar-adjusted industrial production index in October.

Four economists expected the index, seen as a preliminary indicator of growth, to expand as much as 1%, while two others expected a contraction of up to 1.1%.

President Tayyip Erdogan’s economic programme prioritises growth, exports, investments and employment while cutting interest rates.

The central bank has cut its policy rate by 500 basis points in the last four months, lowering it to 9% in November after Erdogan called for single digits by year-end.

The bank justified the cuts by saying financial conditions must remain supportive to maintain the growth in industrial production.

The index expanded only 0.4% in September, much below forecast, indicating the impact of declining demand due to the global economic slowdown.

The Turkish Statistical Institute will announce October industrial production figures at 0700 GMT on Dec. 13.

(Reporting by Ezgi Erkoyun and Ali Kucukgocmen; Editing by Daren Butler)