May 14, 2020 / 8:08 AM / 14 days ago

REFILE-UPDATE 1-Turkish March industry output drops 2% annually as coronavirus hits

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ISTANBUL, May 14 (Reuters) - Turkish industrial production shrank 2.0% year-on-year in March, data showed on Thursday, as the coronavirus outbreak began to hit the economy and ended a run of six consecutive rises as the country recovered from recession.

In a Reuters poll, output was forecast to rise 1.8% annually. Turkey identified its first coronavirus case on March 11, and soon after imposed strict measures to slow the spread. Many factories temporarily halted operations.

Month-on-month, industrial production was down 7.1% in March on a calendar and seasonally adjusted basis, the Turkish Statistical Institute (TUIK) said.

In the poll of eight institutions, all forecast growth, with predictions ranging between an expansion of 0.5% and 5%. In February, output had climbed 7.5%.

Turkey’s economy expanded sharply by 6% in the last quarter of 2019 after contracting annually in the three quarters to the middle of the year.

The government’s official forecast is for 5% economic growth in 2020, after expansion of 0.9% last year, but analysts expect the pandemic to tip the economy into its second recession in as many years.

The European Bank for Reconstruction and Development (EBRD) this week predicted contraction of 3.5% this year.

TUIK said the March data may be revised as the deadline for value added tax declarations, used in calculating production, had been extended for certain sectors due to the coronavirus and alternative sources had been used to measure output. (Reporting by Daren Butler Editing by Dominic Evans and Ali Kucukgocmen)

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