Turkey | Strong activity confirms our Big data

Industrial Production grew by 10.4% yoy in cal. adj. terms in August, leading to a fast recovery of near 7% in July-August after the sharp contraction of 17% in 2Q. Despite recent financial tightening, given the strength of the 3Q data and big data at the beginning of 4Q we believe that a 0% GDP growth is now more likely.

Key points

• Key points:
• The ongoing strong rise in IP was supported by all main sub-sectors, while the highest contribution continued to come from intermediate goods which remained promising for future production.
• Besides, retail sales showed some loss of momentum but to a lower extent, by increasing 1.4% mom, which corresponds to a yearly growth of 5.8% in August (9% in July-August vs. -12% in 2Q).
• Our monthly GDP indicator nowcasts a yearly GDP growth rate of near 7% for 3Q as of September (52% information), which would imply some negative deviation, led by still poor services sectors contribution.
• We still expect the downward impact of the recent financial tightening to materialize starting from 4Q but more clearly at the start of 2021.
• We believe that a 0% GDP growth is now more likely, maintaining our 2021 GDP growth estimate at 5.5%.

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