Turkey grapples with manufacturing downturn, weak demand amid pandemic

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.

The mixed developments will continue to pose challenges for the Turkish economy as the nation grapples with the impacts of the pandemic, though economic analysts warn current trends may reverse in the coming months due to weak demand and continued strain on the labor market.

Read the full story on Al Monitor.