Turkey | Still solid activity in 1Q21

Summary

Industrial Production (IP) grew by 8.8% yoy in calendar adjusted terms in February, signaling still robust economic activity in 1Q21. Given some uncertainties, we maintain our 5% GDP growth forecast for 2021 by still acknowledging upside risks on our forecast.

Key points

• Key points:
• Seasonal and calendar adjusted IP started to show a clearer deceleration by increasing only by 0.1% mom but the recovery pattern was still maintained since May20.
• IP(sca) grew by 0.1% mom in February mainly supported by capital goods production, where all others recorded monthly contraction (Intermed. goods: -0.4%, Consump. goods: -1% and Energy: -0.4%).
• Our monthly GDP indicator nowcasts a yearly GDP growth rate of near 5.5% as of March (with 50% of information), implying 0.3-0.6% qoq growth for 1Q21.
• Given the current tighter financial conditions, potential new lock-down measures and downside risks on tourism revenues on the gradual pace of vaccination, we maintain our GDP growth forecast of 5% for 2021.

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