Turkey’s industrial production is expected to have contracted 22.5% annually in May due to the near economic standstill brought on by measures to stem the spread of coronavirus.
Turkey logged its first infection on March 11 and soon after many factories halted operations, leading to a larger than expected drop of 31.4% in April production.
Reuters polled six institutions for the median estimate of how much the calendar-adjusted index fell in May. Forecasts ranged between contractions of 16.6% and 31.4%.
Industrial production, viewed as a pre-cursor to economic growth, had expanded for six consecutive months before March. In fact, Turkey’s GDP expanded by 4.5% year-over-year in 1Q20 given the strong January-February performance. GDP growth surged in the second half of 2019 as the economy emerged from its last recession.
The government had forecast 5% growth in 2020 before the coronavirus outbreak, but now most economists see it shrinking to a tune of 3-5% due mostly to a severe slump in the second quarter.