Exports grow in June albeit slowly

Export figures for June were announced by Turkish Exporters Assembly (TİM) President Mehmet Büyükekşi at a press conference on Thursday in the northwestern province of Kocaeli. The growth was 21.56 percent in the first half of the year and total revenues from exports surpassed $53.35 billion. The 12-month cumulative amount also increased by 2.02 percent to reach $106.54 billion.

Evaluating the export figures in a written statement released yesterday, Foreign Trade Minister Zafer Çağlayan said that the results indicate that the $107.5 billion target set in the medium term economic program for the year-end will be reached “without any difficulty.”

“If we add June exports figures to the first five months' officially announced export figures, exports amount to $54.72 billion in the first half of the year, registering a 14.7 percent increase compared to a year before,” Çağlayan said, stressing the importance of this development especially when European markets and global markets have yet to recover from recession.

He particularly drew attention to the fact that Turkey’s exports to its regional countries rose by 11.9 percent to reach $7.34 billion in the first half.

Even though Turkey continued its two-digit growth, its pace has decelerated compared to previous months. In the first five months of the year, exports were rising at an average rate of 23.4 percent, nearly twofold that in June. Büyükekşi attributed the slowdown in the growth of exports to a rapid drop in the value of the euro due to the European debt crisis along with austerity measures taken in several EU countries.

The impact of the EU crisis was huge in the sectors which export most to the EU. The automotive sector, for instance, suffered a loss of 0.47 percent in exports last month over the same month of 2009, compared with the 39 percent growth achieved in the January-May period. The annual growth rate of ready-wear exports also decelerated to 6.3 percent in the sixth month of the year, while its average was 15 percent in the first five months. Chemical materials exports had grown by a stunning 48.9 percent in the first five months, but its growth slowed to 23 percent in June.

“The figures for the top three exporting sectors are alarming,” Büyükekşi noted, calling for the need for a foreign exchange rate stability fund to balance foreign trade against a fall in the value of the euro. The source of the fund could be a 1 percent with-holding tax on short-term cash inflows, he added.

Turkey’s exports to its leading trading markets also lost pace in June, compared to the first five months of the year. Last month, Germany kept its ranking as the best consumer of Turkish goods, buying 9.73 percent of all exports. Germany’s imports from Turkey rose by 8 percent in June compared to one year earlier, well below the average 18 percent annual growth rate seen in the first five months of the year. Exports to the UK, the second biggest purchaser of Turkish goods, also slowed down in the sixth month, increasing by 12 percent in June over one year before, while this figure was 30 percent in the 2010 January-May period. Italy purchased 3 percent less from Turkey last month, while exports to Italy were on the rise at an average annual growth rate of 33 percent in the first five months of the year.

Surprisingly, Turkey’s exports to Israel grew by 20 percent in June from a year earlier, despite rising calls for boycotts from several organizations in both countries. The rise in exports to Israel in the first half of the year amounted to 42 percent compared to the same period of 2009. Relations between the two countries deteriorated seriously after a deadly Israeli raid on a Turkish humanitarian aid vessel en route to Gaza on May 31, claiming the lives of nine peace activists and wounding many more.

According to TİM’s data, the automotive industry enjoyed the highest amount of exports in June with $1.37 billion, registering a drop of 0.47 percent over the same month last year. The ready-wear sector came in second with $1.18 billion, representing a year-on-year increase of 12.81 percent. The iron and steel industry’s exports totaled $1.07 billion in the sixth month of this year, a figure 11.48 percent higher than that of June 2009.

During the same period, the manufacturing industry, which accounts for 84.53 percent of the country’s total exports, enjoyed an 11.58 percent rise in exports to reach $7.75 billion, while the agriculture sector saw a 14.96 percent increase in June of this year from June 2009, up to $1.07 billion. The mining industry enjoyed the greatest climb in June, surging by 54.12 percent to $344.57 million over the same month of last year.