Turkish January Industry Output Fell Most in 23 Years
Turkish industrial production slumped 21.3 percent in January, the most since at least 1986, as exporters unable to find buyers suspended production and fired workers.
The drop in production compares with a revised 17.8 percent fall in December, the statistics office in Ankara said on its Web site today. Output was expected to decline 19 percent, according to the median estimate of nine economists polled by Bloomberg.
The slump comes as the global credit crisis cuts demand in Europe for Turkish-made products such as cars and washing machines. Unemployment hit a four-year high of 12.3 percent in November and the central bank has cut the benchmark interest rate by 5.25 percentage points in four months to stave off recession.
“This is unbelievably bad, it’s disastrous, especially on the manufacturing side,” said Ozan Gaziturk, economist for lender Sekerbank TAS in Istanbul. “I don’t want to think about what this means for unemployment: there are really heavy falls for companies that are selling internally and companies that sell abroad.”
Manufacturing output fell an annual 24.2 percent in the month and the automotive industry slumped 60.3 percent, the statistics agency said.
Declining Exports
Exports fell 26 percent in January from a year earlier to $7 payday loan.9 billion, the statistics agency said on Feb. 27
“In previous crises there’s always been an export market that would give some protection to companies; now there’s no one to sell to,” said Cem Eroglu, economist at Turkiye Vakiflar Bankasi TAO, a state-run lender based in Ankara. “We still haven’t seen the impact of the rate cuts on real economic activity and it’s likely unemployment will hit 14 percent soon.”
Turkey is seeking International Monetary Fund support as economic growth slows and the global credit crisis cuts the flow of foreign investment in emerging markets. The two sides paused their negotiations on Jan. 26. While Turkey said then that talks would resume in 10 days, there’s been no announcement of a date.
Gross domestic product expanded 0.5 percent in the third quarter of the year, its slowest pace in six years, after growing 2.3 percent in the second three months. Fourth-quarter growth figures are due on March 31.