Turkey’s trade gap expands on surging car imports

Turkey’s trade gap expands on surging car imports

Turkey’s trade gap expands on surging car imports

DAILY NEWS photo/ Emrah Gürel

Turkey’s foreign trade gap has widened in July, as the imports’ rise has dwarfed the slight increase in exports by a factor of four, with the spur of an unexpected surge in car and energy imports.

The country recorded a trade deficit of $9.81 billion in July, marking a 22.5 percent rise from last year’s same period, according to data released by the Turkish Statistics Institute (TÜİK).

While the imports have jumped by 10 percent, Turkish exporters could only manage to raise their trade by 2.2 percent and sent $13.1-billion worth of goods abroad.

The remarkable rise in energy and car imports – which surpassed 40 percent on a yearly basis – drove the overall imports to $23 billion.

While the energy imports have surged 4.9 percent and reached $4.7 billion, imports of the motorized land vehicles and their sections skyrocketed by 41.8 percent to reach $1.74 billion.

Moreover, the gold exports have dropped steeply, by 75 percent, from the same month last year.

For the past few months, the rise in gold imports has been the main driver of the trade deficit expansion, but despite remaining at high levels, it had a relatively lower impact in July.

EU market picks up

The seven-month deficit, meanwhile, soared 18.3 percent to reach $60.46 billion.

Noting Turkey’s seven-month export rise was realized at 1.3 percent, Turkish Economy Minister Zafer Çağlayan has said this level was close to the 1.4 percent global average for the same period.

“While the foreign demand is weak, one shouldn’t expect a buoyant export,” he said in a statement released after the announcement of the trade data.

The minister, who has been a champion of diversification of export markets and raising exports, said the brightest outcome of the trade results was an indication of the picking up in the European Union market, the traditional largest market for local tradesmen that has been suffering for years.

The exports to the EU have jumped by 22.7 percent to $5.45 billion. Therefore the bloc has accounted for 41.5 percent of the exports in July 2013, showing great progress from July 2012, when the share was 34.6 percent.

“We can’t say the crisis in Europe has ended, but it’s now possible to say that the worsening trend has come to an end,” Çağlayan said. “But the better thing is that Turkey’s exports have begun to rise before the recovery in Europe.”

Turkish exporters, who received a huge blow in the European market, as much as the rest of the world, have boosted their efforts to sail to new horizons and July data shows that they have achieved a limited success with that aim.

Besides the Middle East, Turkey has raised its exports to all regions. In Africa, it rose by 16.6 percent, in the Far East by 27.4 percent, in South America 10.7 percent and in North American 6.3 percent.

Çağlayan also touched upon the heated issue of the weakening Turkish currency against dollar and said although this was good for exports, the positive impact would remain limited due other factors.

“Since the Turkish Lira is not the only currency that lost value, the advantage of the lira’s weakening is relatively low. Furthermore, the weakening foreign demand will limit the advantages of the Turkish Lira as well. The potential rise in the export prices caused by the import input costs’ rise shouldn’t be ignored as well,” the minister warned.