Turkey Industrial Production: Particularly Strong
The industrial production data released by Turkish Stats Office yesterday highlighted that the economic activity in March was particularly strong in March. The IP index was up by 2.6% y/y despite the reading was 40 bps lower compared to the linked month. The sub-index of machinery setup was 13.8% higher which led us giving the private investment a pat on the back. We might be able to see private investment supporting the economy in 1Q 2016 at last.
The Outlook of Foreign Direct Investment
Turkey is running a large current account deficit and is a big borrower from abroad as the deficit roughly accounts for 6% of the country’s total GDP and short-term foreign debt stock hits $130 billion. Under such circumstances foreign capital would suppress the rising concerns around the country’s debt. However, Turkey seems to be less attractive to consistently high foreign direct investments leaving the country less able to deal with the stress on its financial system.
The...