Turkey grapples with manufacturing downturn, weak demand amid pandemic
As demand and manufacturing output dip during the novel coronavirus crisis in Turkey, analysts warn inflation may rise in the coming months.
ISTANBUL — The coronavirus pandemic continues to take a heavy toll on global economies and Turkey is no exception. To date, the nation has recorded 127,659 confirmed cases of COVID-19 and 3,461 virus-linked deaths. Turkish leaders continue working to stem the spread of the disease with mixed success, as its domestic economic impacts materialize in the latest financial data.
A gauge on manufacturing output in April fell to its lowest point since the 2008 financial crisis, posing employment challenges for the sector, according to a report published Monday by Istanbul Chamber of Industry and IHS Markit.
The Purchasing Managers Index, a composite figure of manufacturing performance, dropped from 48.1 in March to 33.4 last month as a devalued Turkish lira increased input costs for companies, with repercussions for new orders and staffing.
The news comes after Turkey’s Central Bank lowered its 2020 inflation forecast Thursday to 7.4%, down from 8.2% in January, though April figures released today indicate inflation slowed slightly less than expected. While Turkish regulators have highlighted a record slump in oil prices as a key deflationary trend, rising food prices put upward pressure on overall inflation in the country.
