Turkey's industrial production grew at its slowest pace in almost two years in August, data showed on Tuesday, reinforcing concerns about a sharp slowdown as the one-time star emerging market combats a currency crisis. Industrial output grew a calendar-adjusted 1.7 percent year-on-year in August, the data showed, marking its slowest expansion since December 2016. Still, that was higher than the 1.25 percent expansion predicted in a poll of eight analysts by Reuters.
The lira has fallen some 35 percent against the dollar this year on concerns over President Tayyip Erdogan's grip on monetary policy and a rift between Ankara and Washington, a sell-off that has hit the wider economy. "Even though August figure supports the idea of slowdown in economic activity, it also shows a less-than-expected slowdown in a time when volatility in financial markets peaked," Muammer Komurcuoglu said, an economist in Is Investment.
"Preliminary data signifies that the slowdown in industrial production will accelerate as of September and the index might show an annual recession." Turkey has promised to support the real sector by taking measures to protect businesses from impacts of what President Tayyip Erdogan called "an economic attack". Month-on-month, industrial production fell 1.1 percent in August on a calendar and seasonally adjusted basis, the data showed.