Turkey’s May trade deficit surges nearly 50 pct as gold imports skyrocket

Turkey’s May trade deficit surges nearly 50 pct as gold imports skyrocket

Turkey’s May trade deficit surges nearly 50 pct as gold imports skyrocket Turkey’s foreign trade deficit soared 49.5 percent in May due to a sharp increase in gold imports despite robust car exports, preliminary data from the Customs and Trade Ministry showed on June 2. 

The trade deficit rose to $7.65 billion in May, according to the ministry’s data, which was compiled by Reuters. 

Exports rose 9.5 percent to $13.22 billion and imports climbed 21.4 percent to $20.88 billion, the data showed.

Turkey’s trade gap rose to $25.2 billion in the first five months of the year with a 17.2 percent year-on-year increase, the data showed. 

While the exports rose to $63.9 billion with an 8.9 percent increase in the mentioned period, its imports saw $89 billion with an 11.1 percent year-on-year increase. 

According to analysts, a dramatic rise in gold imports in May just ahead of the country’s hot wedding season played a key role in opening the trade gap. People also flocked to gold as a “safe haven” amid several uncertainties, they added. 

Gold imports to Turkey rose to 48 tons in May, up from 23.9 tons in April, and marking the highest monthly imports since August 2008, data from the Istanbul bourse also showed on May 31. 

According to the ministry data, while Turkey made $1.4 billion worth precious metal exports in May 2016, it imported $2.23 billion in imports in this area this May. The sector thus became the second largest importer in May 2017. 

Turkey’s precious metal exports, however, regressed to $991 million in May with a 30 percent year-on-year decrease, showed the data. 

An expert on gold and money markets said the demand for gold soared ahead of the holy month of Ramadan as well as the busy summer wedding season. 

“In addition to this, a rise in geopolitical risks in the region and a soaring demand from Iraq for jewelry played a key role here,” said Mehmet Ali Yıldırımtürk, as quoted by Reuters. 

He noted that Turkey’s gold imports, which were 106 tons last year, might rise to 130 or 140 tons this year. 

The automotive sector continued to be the largest exporter in Turkey, with the sector accounting for more than 40 percent of the $5.2 billion increase in exports in the first five months of 2017. 

Meanwhile, Turkey’s top importing sector continued to be the energy sector in May at around $2.9 billion, a 36 percent year-on-year increase.