Turkey’s foreign trade deficit widened 13.2% y/y to $4.16bn in October amid a continued weakness in exports, data from statistics office TUIK showed on November 30.
Exports fell 3% y/y to $12.84bn in the month, following a 5.8% y/y decline in September. Imports, on the other hand, edged up 0.5% y/y to $15.3bn in October after registering a 0.7% drop in the previous month.
Turkey’s currency has lost 6% of its value against the US dollar this month, and has weakened nearly 17% since the beginning of the year. In theory, a weaker currency should help Turkey boost its exports but this is not happening. Shipments to the EU, the country’s largest trading partner with nearly 50% share in exports, fell 0.8% y/y in October to $6.2bn while they increased only 7.1% y/y in January-October.
The situation is even worse with Iraq, the third largest destination for Turkish exports. Data showed that shipments to this country were down 11% y/y to $775mn in October and exports declined 17% y/y in the first ten months of the year. As for Russia, the outlook is not very promising either despite Ankara’s diplomatic efforts to warm ties with Moscow. Exports to Russia plunged 50.3% y/y to $175mn in October and the decline was 58% y/y in January-October.
TUIK also reported a 6.9% y/y decline in exports to Africa that had a 7.6% share in Turkey’s total exports.
On the positive side, exports to the Middle East, accounting for a 23% share in total exports, increased by 11.7% y/y in October but they fell 4% y/y in January-October. Another bright spot is America. Exports to the continent rose by 16.3% y/y in the month. The continent’s share in Turkey’s total exports was 7% in October. Exports to this market, however, fell 1% y/y in the first ten months.
On the imports front, the good news is that Turkey’s energy costs continue falling. Its energy import bill declined by 16.9% y/y to $2.3bn in October and shrank 32% y/y to $22bn in January-October.
TUIK on the other hand reported a 3.2% y/y increase in consumer goods imports and a 5% y/y rise in capital goods imports while the country’s intermediate goods imports fell 1.3% y/y in the month.
On the back of the October data, Turkey’s foreign trade deficit reached $46.24bn in January-October, a 12.5% decline from a year ago. Exports fell 2.8% y/y to $117bn and imports were down 5.8% y/y to $163bn.
The government expects the foreign trade deficit will narrow to $54.9bn this year from $63.4bn in 2015.
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