Türkiye | Weaker activity signals in 4Q so far

Industrial production (IP) surprised to the upside and grew 2.5% y/y in October (vs. 0.1% expected). Though, weaker activity in 4Q so far puts slight downward risk on our 2022 GDP forecast of 5.5%. We forecast 3% GDP growth in 2023 with expected solid performance in the first half of the year.

Key points

• Key points:
• In seasonal and calendar adjusted series, monthly IP recovered by 2.4% m/m and resulted in a quarterly contraction of 1.7% in October vs -4.1% qoq in 3Q.
• The recovery was uneven as other transportation, machinery and computer, electronic and optical products were the main drivers and differentiated much more positively on behalf of the domestic demand driven sectors.
• Despite the positive surprise of October figures, November leading indicators signal that this recovery might be temporary.
• Based on the leading indicators and our big data proxies, our monthly GDP indicator nowcasts a yearly growth rate of 1.8% for December (with 23 of information), signaling a negative quarterly growth for 4Q.
• We expect more expansionary policies ahead of elections to reverse the recent deceleration in activity.

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