Turkey’s trade deficit narrows sharply amid oil slump

Turkey’s trade deficit narrows sharply amid oil slump

Turkey’s trade deficit narrows sharply amid oil slump

AFP photo

Turkey’s annual trade deficit shrank by more than 25 percent to around $63.3 billion in 2015, the Turkish Statistics Institute (TÜİK) said in a statement on Jan. 29. 

Steep decreases in energy costs enabled the country to post the lowest trade gap since 2009, according to analysts. 

The TÜİK data showed the country’s exports decreased by 8.7 percent to $143.9 billion and imports by 14.4 percent to $207.2 billion in 2015 compared to the previous year. 

In December 2015 exports were $11.8 billion with an 11.1 percent decrease and imports were around $18 billion with a 17.5 percent decrease compared to December 2014.

“Thanks to a dramatic decline in oil prices, Turkey posted the lowest trade deficit in 2015 since 2009… Turkey’s energy bill decreased from $55 billion in 2014 to $38 billion in 2015… Although the loss in the Turkish Lira’s value was good for Turkish exporters, several geopolitical risks and economic problems in Turkey’s energy producer neighbors have neutralized the positive effect of the oil slump over Turkey’s exports,” said ALB Forex research specialist Enver Erkan in a note on Jan. 29. 

He noted that slower economic recovery in the European markets, which are the largest export market for Turkey, has also played a role in the decreasing trend in Turkey’s exports. 

Turkey’s exports were around $157 billion in 2014. 

Odeabank economist Şakir Turan said the net foreign demand will increase with the expected further recovery in European economies in a note. 

Turkey’s exports decreased due to fluctuations in parity, a plunge in commodity prices and escalating geopolitical risks, Economy Minister Mustafa Elitaş said in a meeting earlier in January. 

The developments caused around $30 billion in losses in Turkey’s exports in 2015, Elitaş said, while adding the government would retain its $150-billion target in 2016, even if there was no recovery from the problems.

“While our exports on the euro basis were around 48.3 billion euros in 2014, this figure rose to 53 billion euros in 2015. As we announce our final figures on the U.S. dollar, our exports have, however, seen a decrease. Turkey saw around $12.9 billion in losses in its exports due to this parity effect in 2015. If such an effect had not been the case, we would have posted the same export figures as 2014,” he was quoted as saying by Reuters.