Surging exports and a slowing demand for imports saw Turkey’s trade gap drop sharply during the first eight months of 2012, data released by the Turkish Statistics Institute (TurkStat) suggested on Friday.
One cause of the deficit drop was surging exports, which totaled $100.5 billion during the eight-month period, 12.8 percent higher than the $88.7 billion of exports registered in the period last year. Imports, meanwhile, saw a 2.4 percent decrease over last year, from $160.5 billion to $156.6 billion.
The figures also revealed the rapid shift away from a slowing Europe and towards new export markets by Turkish industry. Exports to the EU clocked in at $4.3 billion and registered 33.6 percent of total Turkish exports in the month of August, down from 43.8 percent in August of last year. Exports to the UAE, meanwhile, shot up seven-fold from August of last year to $2.2 billion, making it Turkey’s largest trading partner. That upset Germany’s traditional spot at the top of the export list and put Germany in second place while surging exports to Iraq made it Turkey’s third largest export market in August. Russia meanwhile took the lead in exports to Turkey, selling $1.7 billion in goods to Turkey over the month of August.
In a Friday press conference, Economy Minister Zafer Çağlayan praised exporters’ ability to diversify export markets, stating in comments carried by the Cihan news agency, “Our efforts to boost exports continues as it has over the past three years by focusing on increasing exports to the Middle East, North and South America and Africa.”
Manufacturing, gold exports on the rise
The report was also a strong signal for Turkey’s manufacturing sector, which made up 95.4 percent of the $12.9 billion of August’s exports. The dominance of manufacturing in the narrowing deficit figures comes as Turkey looks to strengthen its role as a regional powerhouse in automotive and electronics production. Automotive production was nevertheless one exception to industry’s strong August performance, with TurkStat registering only $798 million in automotive exports in August, versus $1.16 billion the month before. The Automotive Manufacturers’ Association (OSD) stated in a report last week that Turkey’s motor vehicle output in August is down by 29 percent compared to last year.
The report also comes as Turkey’s trade gap receives a boost from a massive gold sell off. Iranian buyers — who have flocked to gold as a refuge against a sanctions-weakened currency — set records in the first six months of this year when they purchased $6.2 billion in gold from Turkey, versus a total of $4.3 billion for the years 2010 and 2011 combined. The gold rush continued in August, when exports of “precious stones and metals” totaled $2.4 billion, up from $2.08 billion in July.
The foreign trade deficit has in recent years been a highly problematic issue for Turkey, which relies on foreign suppliers for nearly all of its energy needs and whose industries are heavily dependant on foreign intermediate goods to keep their wheels turning. This gap grew to a barely sustainable level for the country over the past two years when ballooning domestic consumption and its breakneck economic growth swelled import figures.
The problematic trade deficit has continued a gradual decline from the beginning of the year, when a global slowdown led experts to worry if Turkish exports — especially to crisis-rocked Europe — would lose momentum and keep the deficit growing. In addition to encouraging exporters to diversify their export markets, Turkish government officials have also made domestic gas exploration and acquisition of natural gas and oil abroad by state-owned energy firms a key part of the government’s plan to permanently reduce the trade deficit. “We’re not sprinting here, we’re running a marathon,” Cağlayan said on Friday as he underlined the need for the government to have a long term plan for trade deficit reduction.
(Today’s Zaman)
