Report: Economic Indicators of Turkey, December 2011

INDUSTRIAL PRODUCTION

In September, industrial production increased well above expectations. According to Turkstat, in September industrial production increased by 12% compared to the same month of the previous year, well above expectations. This rapid increase could be attributable to the convergence of  the  economic activity which lost momentum in previous month due to Ramadan  back  to its trend.

In September, seasonal and calendar adjusted industrial production also increased by 1.5% compared to the previous month.

Industrial production data, as a leading indicator of economic growth,  point out a “gradual” slowdown in domestic economic activity  during recent period. Indeed, in the third quarter of 2011 industrial production increased by 7.5% over the same period of the previous year. In the coming period, deceleration in industrial production  growth  is expected to continue in  line with the developments in international markets. As a result of the continuing weak course in foreign markets and the relative slowdown in domestic demand within the framework of the measures taken in the fourth quarter of the year, we anticipate the annual GDP growth to be realized around 7.8% in 2011.

EMPLOYMENT

Number of employed person increased 1.7 million in the last yearAccording to the Household Labor Force Survey, in August the unemployment rate fell by 2.2 points to 9.2%, compared to the same month of previous year. In the same period, seasonal adjusted unemployment rate declined to 9.6%.

During the last one year period, the number of employed in Turkey increased by 1.7 million to 24.9 million.  In this period, services and agricultural sector provided the highest contribution to employment growth. In addition, employment increase in construction sector, which  displayed a rapid growth in post-crisis period was also remarkable.

DEFICIT

In October, trade deficit was realized lower than expectedIn October, imports increased by 15.1%, while exports rose by 8.9% compared to the same month of the previous year.  The trade deficit  remained below the expectations increasing by 26% to $8 billion, the lowest level since February 2011. This figure confirms the expectation that the widening in foreign trade deficit would

Deepening problems in Euro Area raises concerns.The share of EU-27 in Turkey’s exports is nearly 47%. On the other hand, due to political tensions in North Africa, the share of this region fell below 5%. Deepening of the problems in EU countries especially in Italy, which has a share of 6% in Turkish exports, and contagion of the crisis to the core countries like Germany and France are among the main risks for Turkish economy in 2012.

In September, current account deficit was realized parallel to the expectations.In September, current account deficit was realized as $6.8 billion, parallel to the expectations. Thus, in the first nine months of 2011 current account deficit reached $61 billion and doubled its level in the same period of the previous year. 12-month cumulative figures, on the other hand, rose to $78 billion.
BudgetAfter  having displayed  a strong performance in the first nine months of the year, latest budget figures indicated that the favorable outlook continued also in October. In October, primary surplus increased by 119% to TL769 million, compared to the same period of previous year. Thus, during January-October period, primary surplus reached TL35.7 billion, 2.5 times higher than the budget target.

BANKING SECTOR

As for the banking sector following major results were recorded

Deposit volume increased by 11.4% compared to the year-end.
Exchange rate adjusted credit volume increasedby 20.9%
Consumer loans growth lost momentum.
Net FX position of the banking sector was realized as (+) $68 million.

SOURCE: ISBANK.COM.TR