ISTANBUL (Reuters) – Turkey’s industrial output slumped a more-than-expected https://tmsnrt.rs/3fhRmbf 31.4% and its current account deficit widened beyond $5 billion 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% in April on a calendar and seasonally adjusted basis, according to the Turkish Statistical Institute data.
The year-on-year 31.4% drop exceeded a Reuters poll forecast of 17% and compared with a 2% fall in March.
(GRAPHIC – Turkey's output continues expanding in December: https://fingfx.thomsonreuters.com/gfx/editorcharts/qzjpqjzqxvx/eikon.png)
“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% 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 $4.844 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 5% 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 <TRYTOM=D3> was slightly firmer on Wednesday, standing at 6.8295 against the dollar at 0922 GMT, compared to a close of 6.8390 on Thursday.
(Editing by Jonathan Spicer and Andrew Heavens)