Trade deficit shrinks one-third
ISTANBUL- Hürriyet Daily News
Vehicle and car parts are leading items in Turkey’s exports but the shrinkage in the EU market is hurting the sector.A sharp fall in Turkey’s foreign trade gap, 31 percent in October from the same month last year, may help the country receive better ratings from international credit evaluators, an economist has said.
Exports grew by 11.6 percent year-on-year in October, while imports posted a 5.6 percent decline in the same compared period, according to Turkish Statistical Institute (TÜİK) data compiled in cooperation with the Economy Ministry. The 12-month gap excluding energy dropped to $33.2 billion, the lowest level since October 2010.
“The outlook for the foreign trade balance helps the current account deficit improve and in a sense this strengthens the possibility for [Turkey] to receive an investment level rating from another rating agency. Given the current levels of ratings, we expect Moody’s to elevate Turkey at investment level in the first half of 2013,” said Gülay Elif Girgin, an economist at Oyak Yatırım, Anatolia news agency reported Nov. 30.
Fitch Ratings upgraded Turkey to investment grade in early November.
The October export volume of nearly $13.3 billion is the highest monthly exports figure to date, said Economy Minister Zafer Çağlayan in a written statement.
“We will break the annual export record as we did the monthly figure,” he said. The last 12 months of exports amounted to $149.8 billion, a figure which Çağlayan expects to be surpassed by the end of the year. The export figure for the first 10 months hit $126.3 billion, posting an 11.6 percent increase year-on-year, he said.
“The monthly export record came despite gold exports receding to the lowest level in last seven months,” he said.
However, T-Bank chief economist Veysi Fertekligil said exports did not perform well on either a monthly or annual basis when gold sales are excluded.
Europe’s share falls
The October foreign trade deficit figure is lower than market expectations, he said. “It seems that the expected acceleration in the economy in the last quarter has not been realized and the growth rate will be low in the last quarter, which may encourage the Central Bank to drop the interest rate.”
The share of the European Union in exports fell to 40 percent from 44.2 percent last October, TÜİK said.
In October exports coverage of imports was 70.7 percent, up from 59.8 percent compared with October 2011.
For October 2012, “precious stones and metals” has by far the highest value exported, at $1.5 million, followed by “vehicles other than railway or tramway rolling-stock and parts thereof” at $1.3 million. The top categories for imports were “mineral fuels and oils” at $4.96 million and then “boilers, machinery and mechanical appliances” at $2.15 million.