Leap in industrial output

ANKARA – Turkish industrial output jumped a yearly 12.3 percent in October, official data showed yesterday, well above market expectations and raising hopes that Turkey will beat its economic growth target for 2003. Analysts said strong exports had driven the rise in output, which surpassed market predictions of 9.6 percent. Turkey targets gross national product (GNP) growth of 5 percent under a $16 billion pact with the International Monetary Fund (IMF). In a Reuters poll published on Monday, analysts predicted that GNP would rise 5.6 percent this year. «The figures are very, very good… Exports are basically the driving force,» said Atif Cezairli at ING Barings in Istanbul. Output of motor vehicles soared 50.4 percent and electrical machinery and equipment, 39.5 percent. Both are key exporting sectors in Turkey. IMF-backed structural reforms are helping to pave the way for sustainable economic growth in the EU candidate country, which is recovering strongly from a financial crisis that peaked in early 2001. The State Statistics Institute said October output in the manufacturing sector rose 12.6 percent, while output of utilities increased 10.8 percent. The metals sector was up 9.1 percent. The rise in overall October industrial output was less than in September, when the index rose 13.3 percent year-on-year, but stronger than in any other month since January. A lower 9.7 percent rise in the output of the food sector, which is more sensitive to domestic demand, reflected the importance of exports to strong economic growth in Turkey. Turkish exports climbed 30.4 percent to around $36 billion in the year to September. Strong data that month and in August helped a previously widening current account deficit to narrow. Meanwhile, the slow recovery in domestic demand since the financial crisis helped Ankara lower consumer price inflation (CPI) to below a year-end target of 20 percent in November, from around 70 percent in late 2001. Rising exports, aided by low labor costs, have also led to higher industrial capacity usage in the IMF debtor. Manufacturing capacity was 80.8 percent in October, down from 83.6 percent in September, but more than in both July and August.