Egypt Independent

Turkish industry slammed by coronavirus curbs



ISTANBUL (Reuters) — Turkey’s industrial output slumped a more-than-expected 31.4 percent and its current account deficit widened beyond five billion US dollars in April as it felt the impact of measures to stem the spread of the novel coronavirus, data showed on Friday.

Many factories and businesses halted operations after Turkey identified its first COVID-19 case on March 11 and imposed restrictions.

The disruption is expected to mark the second severe contraction in as many years in the major emerging market economy.

Month-on-month, industrial production was down 30.4 percent in April on a calendar and seasonally adjusted basis, according to the Turkish Statistical Institute data.

The year-on-year 31.4 percent drop exceeded a Reuters poll forecast of 17 percent and compared with a two percent fall in March.

“The collapse in activity in April will probably mark the low point for Turkey’s economy,” said Liam Peach of Capital Economics, adding an estimated 15 percent quarterly contraction in the second quarter will be one of the worst among peer economies.

Industry Minister Mustafa Varank said on Twitter the fall was driven by both domestic and foreign demand, and that “a recovery began in May and accelerated in June” and should grow through year end.

Turkey’s central bank said the current account deficit grew in April to $5.062 billion, exceeding a poll forecast of $4.5 billion. In March it was $4.84 billion.

Pandemic measures have hit exports and tourism revenues, reviving long-standing concerns about the growing deficits that can leave economies reliant on speculative inflows of funds.

The government had forecast five percent economic growth in 2020 before the coronavirus outbreak and has since maintained it could remain positive. But most economists see a contraction this year due to a near stand-still in the second quarter.

The Turkish lira was slightly firmer on Wednesday, standing at 6.8295 against the dollar at 9:22 am GMT, compared to a close of 6.8390 on Thursday.

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By Daren Butler

Editing by Jonathan Spicer and Andrew Heavens

Image: A porter waits for customers in Diyarbakir, Turkey, March 11, 2020. (REUTERS/Sertac Kayar)