Union warns of industrial slowdown for Turkey

First quarter industrial growth figures indicate a sectoral slowdown, according to the March Economy Bulletin released on Monday by the Turkish Confederation of Employers’ Unions (TISK). The bulletin noted that as of March, manufacturing industry capacity was at 72.

4 percent, a slight year-on-year decline and a discouraging outlook for the rest of the year regarding growth. Official figures from earlier this month showed industrial production falling 22 percent

First quarter industrial growth figures indicate a sectoral slowdown, according to the March Economy Bulletin released on Monday by the Turkish Confederation of Employers’ Unions (TISK).

The bulletin noted that as of March, manufacturing industry capacity was at 72.4 percent, a slight year-on-year decline and a discouraging outlook for the rest of the year regarding growth.

Official figures from earlier this month showed industrial production falling 22 percent year-on-year, disappointing economists who had predicted positive growth.

Noting that Turkey has bolstered its growth via large amounts of debt while savings rates have decreased, the bulletin said that the short-term foreign debt total rose from $16 million in 2002 to $133 million in 2015.

The bulletin said that Turkey and Brazil, which is also experiencing industrial decline, will be among the developing countries most affected by the anticipated hike in interest rates by the US Federal Reserve, a move likely to happen in the second half of this year

Economists have argued that Turkey needs to pursue a more balanced approach to economic growth based on strengthening the country’s industrial sector Entrepreneurs often prefer to invest in construction, which is seen as a short-term, high-gain sector, while certain industrial sectors require more investment and long-term focus. Deputy Prime Minister Ali Babacan last year emphasized the need to look toward the industrial sector and away from construction.

However, he was rebuked by pro-government real estate tycoon Ali AIaoIlu and was indirectly contradicted by President Recep Tayyip ErdoIan, who rejected the idea that focus should be directed away from the construction sector, which is largely responsible for the economic boom that Turkey has experienced over the past decade

SOURCE: TODAY’S ZAMAN