Türkiye | Activity decelerates fast in early 3Q

Industrial Production continued to surprise on the upside and grew 8.5% y/y in cal. adj. terms in June. Monthly GDP indicator nowcasts a quarterly GDP contraction of near 1% as of early August, while we maintain our 2022 GDP growth forecast at 5%.

Key points

• Key points:
• Monthly IP recovered in June (1.3% m/m) on the back of consumer and intermediate goods, whereas capital and energy goods production contracted in monthly terms.
• In terms of quarterly trends, although there has been some deceleration to 1.1% q/q in 2Q22 (vs 2.1% q/q in 1Q22), IP growth remained solid.
• Despite the spill-over effects from the war in Ukraine and tighter global financial conditions, activity remains resilient so far as we nowcast a yearly GDP growth rate of 5.7% in July and 2.6% in August.
• According to our big data demand indicators, domestic demand starts to adjust and slows down significantly in early 3Q.
• According to our nowcasts, GDP growth rate has started to demonstrate a much faster deceleration in early August after the resilience of the economy in the first half of the year.

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