ECONOMICS > Gold sales to Iran help Turkey cut trade gap


Turkey’s foreign trade deficit improves month after month. The gap was down 30 percent year-on-year in June to $7.18 billion. A $1.3 billion of gold purchase from Iran plays a role in improvement

Print Page Send to friend »
Turkey’s exports jumped 16.9 percent year-on-year in June as imports fell slightly.

Turkey’s exports jumped 16.9 percent year-on-year in June as imports fell slightly.

Turkey’s foreign trade deficit, often seen as a structural problem of the Turkish economy and recently put in the international spotlight by rating agencies, continued to improve last month on the back of favorable April and May data.

A slowing domestic economy, declining oil prices and gold sales mostly to Iran supported the improvement in the deficit.

“Exports in June marked the highest monthly exports to date,” Economy Minister Zafer Çağlayan said yesterday.

Exports in June increased by 16.9 percent reaching $13.2 billion compared with the same month last year, while imports were down 5.4 percent to $20.4 billion, according to tentative data released by the Turkish Statistical Institute (TÜİK).

Foreign trade deficit plunged 30 percent to $7.18 billion from $10.25 billion. The deficit contracted 27.3 percent in April and 15.5 percent in May.

“We continue to foresee that in the absence of a severe recession the improvement in external balances will continue, but be more gradual,” Özgür Altuğ, the chief economist at the BGC Partners in Turkey, said yesterday.

According to year-on-year calendar adjusted data, imports decreased by 1.5 percent in June, while the figure for exports was the same at 16.9 percent of increase. In the first six months of the year, foreign trade deficit reached $42.8 billion posting a 21 percent year-on-year decline. June data showed the 12-month cumulative deficit dropped to $94.6 billion from $97.7 billion. Monthly trade deficit, excluding gold and energy, decreased from $4.7 billion in May to $2.7 billion in June. Imports, excluding gold and energy, decreased from $15.9 billion in May to $14.1 billion.

Gold-hungry Iran
Turkey’s overall exports to the Islamic republic shot up by 471 percent reaching nearly $1.6 billion thanks mainly to gold sales. Precious metal and stone sales skyrocketed by nearly 693 percent year-on-year to $1.6 billion in June, $1.3 billion which were sold only to Iran. In the first six month of the year total precious metal and stone sales amounted to $6.77 billion expanding 318 percent compared with the same period last year. Iran took the lion’s share with $4.4 billion of purchases alone.

Iran, which is under growing economic and financial sanctions, has found it harder to execute international payments via the international banking system, resulting in payments made with gold. Iranians have also demanded increasingly more gold as a hedge against inflation.

Excluding precious metal sales to Iran, increase in Turkey’s exports in June would be only 5.4 percent year-on-year.

Export-import coverage ratio increased to 64.9 percent from 52.5 percent in June 2011. The figure was 60 percent in May and 66 percent in April.

Exports to the European Union, the main trading partner, dropped 10 percent last month in an annual comparison as ongoing European economic woes continue to hamper demand. “The proportion of the EU countries was 37.1 percent in June 2012 while it was 48.2 percent in June 2011,” TÜİK’s report said.

Turkish exporters have offset the shrinking market in Europe with a diversifying exports market that is turning mainly toward Middle Eastern and African markets. Exports to Africa rose 3 percent and exports to the Middle East were up by 79 percent with exports to Iran, Iraq, Egypt, Libya and Saudi Arabia booming.


PRINTER FRIENDLY Send to friend »


Notice on comments

Selim Bisevac

8/2/2012 12:15:15 AM

“Currently Turkey is ranked the 13th most attractive destination for FDI in the world, and 9th among emerging countries. This is a great time in Turkey’s history. As a booming country with a GDP growing at an average annual rate of 5 percent for almost a decade, Turkey represents tremendous potential with numerous investment opportunities for foreign investors. Experts agree that this trend will continue into the future. Great work AKP!

mara mcglothin

8/1/2012 3:56:18 PM

Yeah STEPHEN The wealthy in Turkey have already done just that and have "no dog in this hunt". That is why the AKP has had no problem doing what they like. There is so much shady stuff going on! Lighthouse anyone. When exactly are they planning to look into that????

two sides to every coin

8/1/2012 1:30:55 PM

AKP are not held accountable for most things they do, so the true state of the Turkish economy will only be known when it is to late for the average person, You can bet your life when the cookie crumbles the rich will have moved all their money, through prior notice to do so by the elite.

Can Kent

8/1/2012 12:45:11 PM

If gold is imported and reexported, it has no influence on the trade balance. I read no serious article in the Turkish press about the real reasons of this trade improvements: is it the weakening lira or new export markets, or substitution to imports?

Rosalind Polat

8/1/2012 11:45:09 AM

When will the "true" financial state of Turkey finally be revealed?

Red Tail

8/1/2012 11:40:56 AM

Where did the gold come from? Obvoiusly imported. So first we import and then export gold. If you look at the entire transaction, it should not have any impact at all on the trade gap, unless of course we refine it or if is gaining value. The only thing might be that you meassure the import during one period, and the export during another. But overall it does not improve or worsen our situation.
< >


AcerPro S.I.P.A HTML & CSS Agency