Turkish manufacturing growth halves in lira slump
Turkey’s industrial production growth halved in June as a slump in the lira’s value and surging inflation impacting businesses.
Output expanded 3.2 percent annually in June compared with 6.4 percent in May, figures published by the Turkish Statistical Institute on Thursday showed. Manufacturing grew 2.9 percent while output in mining and quarrying increased 7.2 percent.
Industrial production declined by 2 percent in June from May, contracting for a second-straight month, the institute said.
Turkey’s lira has slumped almost 40 percent against the dollar this year and headline consumer price inflation has accelerated to almost 16 percent, paring demand for goods and services. Inflation in the industrial sector jumped to 25 percent in July as the cost of imported goods surged.
Most economists expect the slump in the lira and galloping prices to lead to a marked economic slowdown or contraction in the third quarter of the year. The economy expanded an average of more than 8 percent in the nine months to April as the government stimulated growth with tax cuts, investment incentives and financial amnesties ahead of presidential and parliamentary elections on June 24.
Durable goods production slumped an annual 2.4 percent in June and by 6.4 percent month-on-month, the Institute said. Non-durable goods output fell 1.6 percent monthly and intermediate goods by 2.3 percent, it said.