Turkey's industrial production rises 2.4 pct in May

The 2.4 percent of year-on-year growth revealed a sharp decrease compared to the 6.3 percent growth recorded in April.

 

Analysts expect the slower growth trend to continue for the remainder of the year amid a general economic slowdown, but do not expect the data to change expectations of imminent interest rate hikes.

 

A Reuters poll of 14 economists had given a median forecast of 2.55 percent for industrial output growth, with forecasts ranging from 0.3 percent to 5 percent growth.

 

"More than half of this growth was thanks to the 20.7 percent year-on-year increase in automotive output which followed strong export performance in the sector," Reuters quoted JP Morgan economist Yarkin Cebeci.

 

"The slowdown in growth is in line with our view that following the strong performance in the first quarter economic activity should lose speed in the remainder of the year," he said.

 

I expect full-year gross domestic product growth of 3.8 percent and the central bank will raise interest rates by 50 basis points at its monthly meeting next week, Cebeci also said.

 

In the sub sectors level of industry, the mining sector index increased by 2.6 percent, the manufacturing industry sector index increased 1.9 percent, and the electricity, gas and water index rose 6.6 percent in May, 2008 compared with same month of the previous year.

 

The five-month average forÂ2008 saw the total industry sector index rise by 5.8 percent, the mining sector by 6.4 percent, the manufacturing industry sector increase by 5.4 percent, while the electricity, gas and water sector increased by 8.6 percent compared to the previous year.

 

The highest rates of change in the Manufacture Industry Production Index for May 2008 compared to May 2007 were realized in the manufacture of motor vehicles, trailers and semi-trailers with 20.7 percent, and the manufacture of electrical machinery at by 12.4 percent, and the manufacture of paper and paper products at 11.9 percent.

 

Economists had expected May industrial output data to show a sharp slowdown in growth due to global credit problems and domestic political uncertainty. Interest rate increases have also put the brakes on economic growth.