Robust act v ty

Alvaro Ort z,

Dünya Executive - - REPORT - Econom st, BBVA

Turkey’s ndustr al product on growth was 10.4% year-on-year n September, h gher than both market consensus and our expectat on. Th s took the Q3 ndustr al product on growth up to 10%, from Q2’s

4.6%. Meanwh le, reta l sales fell by 1.2% year-on-year n September hav ng Q3 growth of 1.3% aga nst Q2’s 0.7%. Add ng up to the prev ous year’s contract on and cons der ng the new IP real zat on, our monthly

GDP nd cator now casts 7.9% year-on-year growth for Q3. The start of the 4Q s also prom s ng as October’s electr c ty product on ma nta ned a strong growth path and manufactur ng PMI posted ts above-50 level for the e ghth month n a row w th a r se n new orders. In contrast, there s some moderat on on sent ment nd cators. In sum, our models suggest strong growth pattern n both Q3 and the start of 4Q. Th s s n l ne w th our 6% GDP growth forecast for 2017, but w th r sks that could be on the ups de. Although we expect some moderat on n econom c act v ty n 4Q on the back of softer cred t growth and eas ng countercyc­l cal measures of the Government, our models suggest a h gher-thann t ally-expected growth rate. However, we ma nta n our top of consensus GDP growth forecast of 6% for 2017 before the Q3 GDP release on Dec. 11. (Nov. 8)

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