ANKARA - Bloomberg
Turkish industrial production rose 2.4 percent in May, its smallest increase this year, as consumer confidence fell to its weakest since records began. Industrial growth eased from an annual 6.3 percent in April, the statistics office in Ankara said on its Web site yesterday. Output was expected to increase 3 percent, according to the median estimate of 17 economists polled by Bloomberg.
Output growth is slowing as domestic spending declines and a global credit crunch makes borrowing more costly. Consumer confidence in May fell to its lowest since records began in 2003 after prosecutors applied to close the governing party, which has presided over record economic growth since 2002.
The slowdown “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,” Yarkın Cebeci, an economist for JPMorgan Chase & Co. in Istanbul, said in a note to investors. More than half of the growth came from “strong export performance” in the automotive industry.
Sales abroad rose 35 percent in May to $12.5 billion, the most in a single month. The economy grew 6.6 percent in the first quarter of the year, its 25th consecutive quarter of expansion.
Production of cars and vans for export rose 20 percent in May from a year earlier, according to the Automotive Industry Association. Passenger car sales in Turkey in May increased 8.3 percent from a year earlier, the slowest increase in eight months, the auto distributors' association said June 6.
The central bank raised the benchmark interest rate by half a percentage point to 15.75 percent on May 15 to fight inflation, which accelerated to 10.7 percent in the month, the highest rate in more than a year.
Consumer spending has also been hurt by a Constitutional Court lawsuit to ban Prime Minister Recep Tayyip Erdoğan and his Justice and Development Party, or AKP, on the grounds they are seeking to undermine secularity.