Turkish output shrinks as currency crisis puts brakes on economy

Turkey’s annual industrial output shrunk for the first time in two years as an economic downturn in the country deepened.

Industrial production fell 2.7 percent, the most since the global economic crisis, after growth of 1.6 percent in August, the Turkish Statistical Institute said on its website on Friday. Output also fell 2.7 percent month-on-month on a seasonally and calendar-adjusted basis, more than double August’s 1.3 percent decline.

Annual production was forecast to increase by 1.5 percent, according to a Bloomberg survey of five analysts. The contraction was the worst in intermediate goods, durable consumer goods and capital goods, the institute said.

Turkey’s economy is in danger of dipping into a recession after the lira lost about a third of its value against the dollar this year due to concern for economic overheating and after political tensions with the United States heightened. The government is seeking to soften the blow to businesses and consumers with tax cuts and other financial aid ahead of local elections in March.

Seasonally and calendar-adjusted industrial production decreased by 0.2 percent in the third quarter compared with the previous three months, indicating that a period of negative economic growth may have already begun, the data showed.

Turkey industrial production