Turkey on road to recovery with 34 percent spike in exports

The figures arrived hot on the heels of fourth quarter gross domestic product (GDP) growth figures from the Turkish Statistics Institute (TurkStat) yesterday which showed that the economy grew by 6 percent in the last quarter of 2009 -- much more than the expected 3.5 percent. The economy shrank in 2009 by 4.7 percent, a higher figure than the expected 6 percent downturn in the Medium-term Economic Program (OVP).

The export figures released by the Turkish Exporters Association (TİM) yesterday in the province of Kahramanmaraş indicated that exports are continuing to propel Turkey's exit from the crisis and have caught the acceleration trend. They increased by a staggering 34.3 percent in the third month of the year compared to the same month last year, even with no renewed International Monetary Fund (IMF) agreement. The figures show that the third month of the year brought a 34 percent growth, reaching $9.6 billion in exports over the same period last year, with total growth of 22.3 percent in the first three months of the year and 16.4 percent growth compared to February's exports.

TİM President Mehmet Büyükekşi, speaking in Kahramanmaraş, stated the importance of these figures for the growth of Turkey's economy. He added that exports were continuing their trend of acceleration after a significant dip in 2009 and that Turkey is regaining some of its losses in its traditional export markets while also making big splashes in new ones.

During the hype over a possible IMF stand-by deal earlier this year, TİM was strongly against such a loan, citing a possible appreciation of the TL leading to decreased exports. He emphasized yesterday that these new export figures were an indicator reaffirming their earlier views and contradicting the thesis that the rejection of an IMF deal would bring doom and destruction upon Turkey.

“It was announced that Turkey would not be continuing talks with the IMF. But yet the stock exchange hit 57,000, interest rates stayed below 9 percent and there was no movement in the exchange rate. Turkey’s ability to continue on its path without the IMF has increased confidence in the nation,” he said. He also criticized those who stated that Turkey could not continue on its path without an IMF agreement, stating that they can “now see what actually occurred.”

Foreign Trade Minister Zafer Çağlayan, also speaking at the Kahramanmaraş Industry and Trade Chambers meeting along with Büyükekşi, stated that these figures were no “April Fool’s joke” and that Turkey had returned to its pre-crisis performance levels with regard to exports.

Çağlayan also stated that the government incentives and stimulus packages given to exports had helped to bring Turkey’s exports to new heights during difficult times. Calling on exporters to persist in expanding Turkey’s exports, Çağlayan stated: “All of the stimuli we’ve given you exporters was from your government. You don’t owe us anything.”

Regarding expectations of growth for the first quarter of the year, both Çağlayan and Büyükekşi stated that Turkey would reach double-digit GDP growth. “We are seeing the signs that this will happen,” Çağlayan said. “The export figures released today are the biggest sign of this.”

Regarding the called off IMF deal, Çağlayan stated that “Turkey has come to a point where it no longer needs IMF accreditation. ... Only eight years ago we would go knocking on the IMF’s door for only a $1 billion loan. But now this all seems like ages ago.”

Cemal Öztürk, the Independent Industrialists and Businessmen’s Association (MÜSİAD) İzmir branch president, speaking to the Cihan news agency regarding the new export figures, stated that “with every dip there is then a climb” and that Turkey was now strongly climbing out of the 2009 crisis. He added that Turkey had settled into a growth trend and these new export figures evidenced the fact that growth would continue.

Central bank should keep interest rates low

Regarding the role of the central bank in supporting Turkey’s exports, Büyükekşi called on the bank to keep its word and hold interest rates at low rates for an extended period of time. He stated that this would bring more investment to Turkey and thus help fight the massive unemployment problem.

Büyükekşi in addition commented on global trade, stating that international trade was also showing healthy signs of recovery. Regarding Turkey’s competitor emerging nations, Büyükekşi said that Turkey increased its exports by 20.3 percent in February, during a time when South Korea, Brazil and India’s exports had increased by a smaller 17, 13 and 12 percent, respectively.

He also emphasized the increased exports to Turkey’s traditional markets such as Europe, stating that Turkey was regaining lost ground. Out of the top 30 export markets for Turkey, 27 of them increased their imports from Turkey in the first three months of the year. He added that exports to Europe’s powerhouses, such as Germany, France, the UK, Spain and Sweden, increased by more than 20 percent, and a healthy 49 percent in the case of Spain. Turkey’s exports to its neighbors are also increasing quickly, as exports to Russia, Iran, Israel, Saudi Arabia, Syria, Turkmenistan and the Ukraine rose substantially, hitting as high as 56 percent in the case of Turkmenistan. Other increases in markets further afield also hit new peaks. Singapore boosted its imports of Turkish goods in the first three months of the year by 467 percent, while China also started buying more goods -- growing exports to the world’s workshop by 116 percent.

According to the figures, the automotive sector again led the export brigade in March to the tune of $1.8 billion, with the apparel sector sending out $1.24 billion to international markets in March. In third place was the iron and steel sector with $1.04 billion in exports.

Sectors related to agriculture totaled $1.2 billion and took a 12.9 percent share of total exports, while the industrial sectors took home receipts for 84.6 percent of all exports. The mining sector accounted for 2.53 percent of March exports with $242 million.

The cut flower sector increased its exports the most compared to a year ago, with over a 110 percent growth. The chemical goods industry boosted its exports by 75 percent over a year ago and the mining sector, despite being a relatively small portion of total exports, grew their exports by 66.7 percent in March.