Exports keep increasing in July, targets likely to be achieved

Exports amounted to $9.42 billion in July, up from $8.89 billion a year earlier. Export volume reached $64.24 billion in the first seven months of the year, a 13.14 percent increase compared to same period last year. The 12-month cumulative amount also increased by 1.99 percent to reach $109.6 billion.

Export figures for July were announced by Büyükekşi at a press conference on Sunday at the Aliağa plant of Turkish petrochemicals producer Petkim in İzmir.

Growth rate of exports in July was low compared to double-digit rates experienced since the beginning of the year. Büyükekşi attributed this fact to decrease in the value of foreign currency rates, especially the euro. “If such developments did not happen, the double-digit growth trend would continue. Despite all negative factors, I believe we still did a great job and should keep morale high.”

Exports were also up by 2.2 percent compared to the previous month.

Foreign Trade Minister Zafer Çağlayan, evaluating July figures in a written statement released yesterday, drew attention to significant increases in exports to Germany, China, the US, Romania and Syria. Our aim is to boost exports to the countries that are already good trade partners with Turkey, while also finding new markets to export to, Çağlayan said, stressing that they are seeking ways to increase their share in world trade. “This is not a shift in axis but the best way to benefit from the Turkey’s geopolitical importance,” noted the minister.

He also 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.

Büyükekşi: CB should reduce interest rates

Büyükekşi noted that recent developments in exchange rate made imports more favorable than exports, rendering a wide foreign trade deficit. Industrialists and exporters suffered a drop in their turnover last year, while their profits rose due to a reduction in interest rates, he asserted, which is clear in both top 1,000 exporters survey of the TİM and top 500 industrialists research of the İstanbul Chamber of Industry (İSO).

TİM head stressed that industrialists and exporters should invest in research and development activities and start exporting more of high value added products. “But in order to achieve this they should make profits, for which the Central Bank of Turkey should ensure stability of the exchange rate,” he said.

TİM had previously predicted exports to rise 10 percent each month in the second half. However with recent developments in the currency rate, Büyükekşi stressed that this target can be achieved only with help.

Büyükekşi called on the bank to reduce policy rates further by 50 basis points and to increase its daily foreign currency purchasing amount, suggesting the bank to purchase 50 million US dollars and 50 million euros daily. Currently policy rates remain at 6.5 percent. He also reiterated his suggestion of a “Foreign Exchange Rate Stability Fund,” which will get its financial resources from a 1 percent withholding tax on the hot money inflows, or portfolio investments, in the country.

In July, Germany kept its ranking as the best consumer of Turkish goods, buying 9.9 percent of all exports. Germany’s imports from Turkey rose by 17.3 percent to reach $1.03 billion last month compared to one year earlier. Çağlayan predicted exports to Germany to reach $10 billion by the end of the year.

Germany was followed by the UK, the second biggest purchaser of Turkish goods, with $590 million in exports. Italy purchased $526 million worth goods from Turkey last month, while Iraq ranked the forth with $525 million in imports form Turkey.

July saw exports to Russia surge by 64.4 percent, with its share in total exports rising from 2.7 percent one year before to 4.13 percent. The US purchased $329 million worth of goods from Turkey, up from $306 million in June 2008, prior to the global financial crisis. Çağlayan stated that they expect this figure to rise further significantly thanks to an official visit that he, along with a large trade mission, paid to the country two months ago.

According to TİM’s data, the automotive industry, the backbone of Turkey’s exports, suffered a 6.09 percent year on year drop in exports last month. Still the industry made the greatest exports, with $1.38 billion, which accounts for 14.68 percent of overall exports. The ready-wear sector came in second with a $1.38 billion in exports.

During the same period the manufacturing industry’s exports, which accounts for 84.65 percent of the country’s total exports, amounted to $7.97 billion, while the agriculture sector exported $1.11 billion. In July tobacco and tobacco products enjoyed the highest increase with a year on year growth rate of 43.59 percent. This was followed by nut exports which rose by 38.35 percent during the same period.