Turkey | Accelerated industrial production in 4Q20

Industrial Production (IP) grew by 12.1% yoy in December, resulting in a higher yearly growth rate in 4Q (10.2%). Despite the pandemic, the full year IP growth rate materialized as 2.2% in 2020. We maintain our GDP growth forecast at 5% for 2021 with some upside risks taking into account the current information for 1Q21.

Key points

• Key points:
• IP(ca) grew by 10.1% in 4Q20 and the acceleration was backed by all main sub-sectors (intermediate goods 12.6%, capital goods 10%, consumer goods 9%, energy 2.1%).
• Despite slow-down in credits and lockdown measures, soft, hard and our big data indicators signaled still robust activity in January, confirmed by our IP forecast of near 6% and our nowcast of a yearly GDP growth rate of 6.8% for January.
• Given the current high momentum, the expected deceleration on tighter financial conditions could be delayed in the last period of 1Q and mostly in 2Q.
• Ongoing expansionary policy measures abroad, attempts to accelerate the inoculation, favorable base effects and stabilization in financial assets will be the supportive factors throughout the year.
• We maintain our 2021 GDP forecast at 5% with some upside risks given the current momentum in 1Q.

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