Turkey’s foreign trade deficit fell by 9.1% y/y to $6.01bn in June, driven by soft imports, data from national statistics office TUIK showed on July 31.

The country’s exports rose by 2.3% y/y to $13.2bn in the month, slowing from May's 12.4% expansion, but imports fell 1.5% y/y to $19.2bn, marking the first decline in imports this year. Prior to June, imports increased by 9.9% y/y and 22% y/y in April and May causing the foreign trade deficit shortfall to widen 16% y/y and 44% y/y, respectively.

Shipments to the EU, Turkey’s largest trading partner, increased only 0.1% y/y to $6.25bn while exports to the Middle East, which absorbed 22% of Turkey’s exports, declined by 3% y/y to $2.9bn. Russia purchased $238mn worth of goods from Turkey, a 101.5% rise from a year earlier while exports to that country increased by 53% y/y to $1.13bn across the first half of the year. Those figures showed the effect of the rapprochement that has taken place between Moscow and Turkey over the first half of this year.

Exports to Germany rose by 6.3% y/y to $1.3bn in June, while they were up 3.5% y/y to $7.2bn in January-June. It remains to be seen whether the ongoing diplomatic row between Ankara and Berlin will have any impact on bilateral trade relations and volumes.

The bilateral trade volume between Turkey and Germany stood at $35.48bn last year.

Some German buyers cancelled trips to Turkey after the rise in political tension between the two countries, Seref Fayat, head of the Turkish Clothing Manufacturers Association, said on July 25.

Across January-June, Turkey’s exports were up 8.2% y/y to stand at $77.45bn and imports moved up by 8.7% y/y to $108bn, leading to a foreign trade deficit of $30.9bn. The country’s foreign trade shortfall thus widened 10% in the first half of the year.

The government is forecasting a foreign trade deficit of $60.7bn for this year with exports reaching $153bn and imports amounting to $214bn. In 2016, the foreign trade shortfall widened nearly 12% to reach $56bn.