Turkish industrial output shrank 20% in May, hit by coronavirus

Credit: REUTERS/UMIT BEKTAS

Turkish industrial production shrank a less-than-expected 19.9% year-on-year in May, data showed on Monday, as measures to curb the spread of the coronavirus continued to drive a sharp economic downturn.

Combines industrial production and current account data

ISTANBUL, July 13 (Reuters) - Turkish industrial production shrank a less-than-expected 19.9% year-on-year in May, data showed on Monday, as measures to curb the spread of the coronavirus continued to drive a sharp economic downturn.

Many factories and businesses halted operations after Turkey identified its first COVID-19 case on March 11. The economy is expected to face its second sharp contraction in as many years as a result of the large-scale disruption.

In a Reuters poll, industrial output was expected to have contracted 22.5% annually. Turkey logged its first infection on March 11 and soon after many factories halted operations, leading to a production drop of 31.4% in April.

However, Turkey began to ease its lockdown in May. Month-on-month, industrial production was up 17.4% in May on a calendar and seasonally adjusted basis, the Turkish Statistical Institute data showed.

Separately, the country's current account deficit narrowed to $3.76 billion in May from $5.09 billion a month earlier, central bank data showed. In a Reuters poll, economists had forecast a $4 billion deficit. In 2019 as a whole there was a surplus of $1.674 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 lira TRYTOM=D3 was flat at 6.8650 against the dollar after the data.

(Writing by Daren Butler Editing by Dominic Evans)

((daren.butler@tr.com; +90-212-350 7053; Reuters Messaging: daren.butler.thomsonreuters.com@reuters.net))

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