Turkey | IP confirms the expected recovery in 4Q19

Summary

Industrial Production (IP) increased by 5.1% yoy in calendar adjusted terms, parallel to the market expectation of 5.5% in November. Thus, IP grew by 4.5% yoy in October-November period. We expect GDP growth in 4Q19 at around 5%, implying 0.8% growth in 2019. Our baseline forecast for 2020 GDP growth remains at 4%.

Key points

• Key points:
• The monthly increase in IP was mostly supported by the intermediate and capital goods production, which is a good signal for further recovery in IP in the near future.
• High frequency indicators (both hard and soft data) and our BigData indices already indicated, GDP growth in 4Q19 could converge to its potential, which will also be supported by a sizable base impact.
• Complacency should be ruled out as the potential for macro imbalances require prudent polices in order to avoid overheating of the economy again.

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