Turkey's industrial output slumps 7.3pc in January

ISTANBUL: Turkish industrial production plunged 7.3 percent year-on-year in January, a bit better than expected, government data showed on Thursday, marking a fifth consecutive month of declines as the economy slides into recession.

The calendar-adjusted output figure was forecast to fall 7.55 percent, based on a Reuters poll, after having contracted by a downwardly revised 10.0 percent in December.

The month-on-month data was more encouraging, showing industrial production rose 1.0 percent in January on a calendar and seasonally adjusted basis, its first rise in six months, the Turkish Statistical Institute said.

Turkey's economy contracted 3 percent in the fourth quarter of 2018 as last year's lira crisis and high interest rates weighed on the major emerging market. Economists expect it to contract in the first two quarters of this year before turning to growth again.

The forecast-beating production data "suggest that the worst of the recession has passed. That said, the recovery is likely to (be) slow-going," wrote Jason Tuvey, senior emerging markets economist at Capital Economics, which expects the overall economy to contract by 2.5 percent in 2019.

Estimates in the Reuters poll of eight financial firms ranged between a contraction in January of 5 percent and 9.1 percent for industrial output, a key signal of economic activity.

The lira stood at 5.4665 against the dollar after the data, little changed. The currency lost nearly 30 percent of its value last year in a sell-off sparked partly by concerns over central bank independence.

Turkey's central bank hiked its policy rate to 24 percent in September to counter rising inflation and support the ailing currency. It hiked a total of a 11.25 percentage points in 2018.