Advanced indicators point to continued strong economic momentum at the start of the year. In January, calendar-adjusted industrial production rose by +12% y/y, following +13.7% in December and an average +10.7% in Q4 2017. Combined with the Manufacturing PMI which came in at 55.6 points in February, well above the 50.0 threshold indicating growth, this bodes well for output growth in Q1 2018. Moreover, real retail sales growth picked up to +10.7% y/y in January from +8.9% in December and an average +5.6% in Q4. Combined with Turkstat’s Consumer Confidence Index which averaged 72.0 points in Q1 2018, well above the average 65.9 in Q4 and 68.6 recorded for all of 2017, this indicates a strong increase in consumer spending in Q1. That said, keep in mind that the strong growth is to a large extent driven by pro-cyclical fiscal stimulus and has caused rising macroeconomic imbalances and mounting overheating concerns (see also WERO 14 March 2018).