Turkish foreign trade deficit 30 pct less worrying in June

Exports increased by nearly 17 percent to $13.26 billion, and imports decreased by more than 5 percent to drop to $20.4 billion in June compared to the same month a year earlier, according to the institute’s data. Thus, the foreign trade deficit of the country was $7.2 billion for the sixth month of the year. It was more than $10 billion in June of last year.

The spike in sales overseas was mostly due to an increase in the export of industrial goods, whereas the fall in imports stemmed from a reduction in the purchase of both consumption and capital goods from abroad.

With the addition of the June figures, the country’s foreign trade performance in the first half of the year was also revealed. According to the official numbers, the Turkish economy produced a deficit of some $43 billion in its trade with other countries in the January-June period this year, in contrast to $55 billion for the same six months of 2011. “I cannot say that we will not even be touched by the [ongoing] crisis in Europe because we already are impacted by it, but my belief is that we are going to get through all these troubles easily given our performance so far [this year],” Economy Minister Zafer Çağlayan said in a written statement released shortly after the announcement of the TurkStat figures.

The 27-member EU -- which Turkey aspires to join -- is Turkey’s largest trade partner by far. A financial crisis, which has already brought down many governments across the continent, forcing three of its small members -- Greece, Ireland and Portugal -- to seek a monetary lifeline from the EU and the International Monetary Fund (IMF), has been plaguing the EU’s economic capabilities for the past three to four years. Most economies within the EU have already stopped growing with the recession spreading from south to north and from the periphery to the core of the union.

At such a time, Turkey embarked on a re-energized policy to discover new export markets elsewhere, efforts focusing particularly on Africa and the Middle East. In the first half of the year, Turkish exports to Africa, Asia and the Americas, as a result, increased by 45, 39 and 30 percent, respectively, compared to the same period a year earlier. The share of goods sold to the EU market in all of Turkey’s exports dropped from 48.2 percent in June last year to 37.1 percent the sixth month this year. “If we did not diversify our export markets, we could have seen an export growth volume of nearly zero percent in the first six months of the year instead of the 13.3 percent we have,” Çağlayan said in the statement.

The foreign trade deficit used to be a highly problematic issue for Turkey, which relies on foreign supplies for nearly all of its energy needs and whose industries are also heavily dependent on foreign intermediate goods to keep their wheels turning. This gap grew to a barely sustainable level for the country as it has outpaced almost all other nations in economic growth in the past two years. The deficit increased from $39 billion in 2009 -- when the Turkish economy contracted by nearly 5 percent -- to $72 billion in 2010, when the economic growth rate was 8.9 percent. It soared to $105 billion, or 13 percent of gross domestic product (GDP), last year, when the national economy grew by 8.5 percent again.

Iran tops list of export markets in June

Just like the growth in export volume, the June figures show the continuation of something else, something that draws much attention from observers worldwide. It is that Iran -- which has been subject to Western sanctions because of its controversial nuclear program -- was Turkey’s top export market in the sixth month of the year, as was the case in the previous month. The value of exports to its eastern neighbor has grown nearly fivefold over a year ago to some $1.6 billion in June. Its exports to Iran already increased more than fivefold in the fifth month of the year to exceed $1.6 billion, compared to some $300 million in May 2011. Of Turkey’s sales to Iran, gold took the lion’s share. It is speculated that Iranians are turning to gold as a method of saving as Western sanctions tighten.

In the list of the largest export markets in June for Turkey, Germany and Iraq followed Iran, with $1.12 billion and $912 million worth of Turkish goods purchased, respectively. In terms of Turkey’s imports in the same month, however, the Russian Federation took the lead with $2.42 billion. It was followed by Germany with $1.82 billion and China with $1.72 billion in revenue earned from exports to Turkey.