Turkish industrial production increased at the fastest pace in 10 months in August as growing domestic demand helped the economy rebound from the global financial crisis.
Output rose 2.7 percent in the month, accelerating from a revised 0.4 percent expansion in July, the Turkish Statistical Institute, or TurkStat, said on its website Friday. Production was up 14.2 percent from August 2009 when adjusted for the number of working days. Without that adjustment, the annual increase was 11 percent, compared with a median forecast of 8.2 percent in a Bloomberg survey of seven economists.
“The monthly figure is important and it’s very strong,” Haluk Bürümcekçi, chief economist at Fortis Bank A.Ş. in Istanbul, said in a telephone interview. “It’s likely to put upward pressure on our annual growth estimate, which is already 7 percent.”
Turkish gross domestic product grew an annual 10.3 percent in the second quarter, matching China as the fastest-growing among the Group of 20 major economies. That followed an 11.7 percent expansion in the first three months.
The central bank has held its benchmark one-week repo lending rate unchanged at a record low of 7 percent for 10 months to support domestic growth amid fears for weakness in the global economy. Low rates have helped to drive an expansion in bank lending that has fueled the economy’s revival even as growth falters in some of its main European export markets.
The pace of the recovery has prompted the central bank to start implementing an “exit strategy” to soak up additional liquidity it provided during last year’s crisis. In the past month it increased the reserves that banks must deposit against lira liabilities, said it will no longer pay interest on the deposits, and stepped up purchases of dollars.