Turkey’s furniture exports expanded by 14% y/y to $3.14bn in 2018 from $2.76bn in 2017, Ahmet Gulec, head of the Turkish Federation of Furniture Associations (MOSFED), said on January 7, Daily Sabah reported.

The export volume slightly beat the initial target of $3bn. For 2019, Turkey is targeting a 20% y/y increase in furniture exports to $3.75bn, according to Gulec.

Iraq, Saudi Arabia, Libya, Israel, Germany, Qatar, the UK, the UAE, France, and the US were the top export markets for Turkish furniture makers last year, he added.

Combined exports of furniture, paper and forestry products rose by 13% y/y to $5.02bn in 2018, the MOSFED head also said. They slightly exceeded the initial target of $5bn, while the 2019 target stands at $6bn.

Iraq, the UK, Iran, Israel, Saudi Arabia, Libya, Germany, Georgia, Greece and Azerbaijan-Nakhchivan were the top 10 export destinations for Turkish furniture, paper and forestry product exports.

Turkey’s ready-wear exports rose by 3.6% y/y to $17.64bn in 2018 while unit exports rose by 7% y/y, Mustafa Gultepe, head of the Istanbul Textile and Apparel Exporters’ Association (iHKiB), said on January 7 in a written statement.

Turkish ready-wear makers retained their position as the country’s second largest industry for exports, trailing only the automotive industry, last year. The industry also holds a big leading position in net exports. Its net contribution in the financing of the country’s current account deficit is important, Gultepe noted. The contribution was calculated at $15.8bn last year.

EU takes 71% of Turkey’s ready-wear
High performance rates of the Turkish ready-wear exporters in Spain, the Netherlands and Russia contributed to export growth in 2018. The EU, meanwhile, absorbed 71% of Turkey’s ready-wear exports volume last year, according to Gultepe.

Turkey is targeting growth of 10% y/y in ready-wear exports in 2019, he also said.

Turkey’s home appliances exports rose by 10% y/y to $2.3bn in 2018, Burak Onder, head of Turkey’s Home and Kitchenware Manufacturers and Exporters Association (EVSID), said on January 7.

Turkey ranked as the world’s 7th largest home appliances exporter last year while the domestic market size was $6bn, including $500mn worth of imports, according to Onder.

Turkey is targeting 15% y/y growth in home appliances exports this year and it is also aiming to increase per-kilogram export revenues to $3.5 from $3.2 in 2018, the EVSID head also said.

Turkish home appliances makers are aiming for market share growth in Colombia, wider Latin America, the Far East and Sub-Saharan Africa in 2019. The EU market took in 55% of their 2018 export volume, followed by the Middle East with 20% and Africa, mainly Northern Africa, with 10%, according to Onder.

Financing struggles
He also complained that Turkish home appliances exporters were struggling with problems in access to financing.

Such difficulties were indirectly picked up on by Robin Brooks of the International Institute of Finance (IIF) in a January 8 tweet, in which he observed: “Turkey's negative credit impulse in Q3 & Q4 exceeds that during the Great Recession [in 2009], when activity fell 5%. There's obviously big differences, including on external debt rollover where things now look better, but I still see downside risk to our -0.9% growth number for [Turkey] this year.”

Turkish non-financial corporates’ net FX liabilities continued to contract in October. The decreased 3% m/m to $204bn, central bank data showed on January 3.

Non-financial firms’ net FX liabilities stood as high as $216bn at end-July. The figure went into a contraction phase after the currency crash that hit its nadir in August. However, the private sector’s foreign liabilities are still Turkey’s main economic woe coupled with high inflation and a recession that appears to be setting in across the domestic market.

The Turkish private sector had obligations to repay $64.75bn in foreign-loan principal payments within one-year as of end-October, down from $66.3bn at end-September, the central bank said on December 14. Turkey was obliged to repay a total of $173.8bn in foreign debt within one-year as of end-October, down from $176bn at end-September, the central bank added on December 17.

Exports at all-time high of $168bn
Turkey’s overall exports, which the government initially forecast at $170bn, rose 7.1% y/y to an all-time high of $168bn last year thanks to the severe lira depreciation, preliminary data from the Trade Ministry showed on January 4.

The government expects exports to rise to $182bn and imports to rise to $244bn in 2019, according to its new economic programme, announced in September.

Delivering bad news when it comes to Turkey’s export targets for 2019, the World Bank said on January 7 in the latest version of its Global Economic Prospects report, entitled “Darkening Skies”, that it expected global growth to slow to 2.9% y/y in 2019 from an estimated 3% y/y in 2018. It also anticipated that growth in the Euro Area, Turkey’s main export market, would slow to 1.6% y/y from 1.9% y/y.

The World Bank sharply cut its 2018 GDP growth estimate for Turkey to 3.5% y/y from its previous forecast of 4.5% y/y and the 2019 estimate to 1.6% y/y from its previous anticipation of 4% y/y.

Despite the sharp revisions downwards, the World Bank’s GDP growth forecasts for Turkey are still significantly higher than other forecasts which indicate there are mounting expectations for a contraction in 2019.

“Currently, we pencil in a 2.0-2.5% GDP contraction for 2019. In that, we project a 3.0-3.5% net export contribution, which means that the halt in domestic demand might mop up 5.0-5.5% of GDP growth next year. That said, if the ongoing strength in the TRY can be sustained throughout 2019, it could yet limit the extent of the slowdown going forward, and may lead to a better GDP growth outcome,” Seker Invest said in its Macro Outlook report for January.