Turkey’s exports grew by 16% y/y to stand at $12.5bn in May, accelerating from a revised 7% y/y increase registered in April, data from the Turkish Exporters’ Assembly (TIM) showed on June 1. In January-April, exports rose 11% y/y to a value of $60bn.
Despite the rising exports, Turkey’s foreign trade gap has been expanding. Across January-April, Turkey’s foreign trade deficit rose 7% y/y to $17.5bn. The trade deficit is the main driver behind Turkey’s chronic current account deficit problem.
Shipments to Russia rose by 73% y/y in May to $201mn, while exports to the EU, Turkey’s largest trading partner with a 48.7% share in May exports, moved up by 16% y/y in the month, according to TIM.
Moscow imposed sanctions after the Turkish air force downed a Russian fighter-bomber near the Syrian border in November 2015. It has lifted many of the restrictions but the ban on the import of tomatoes has been kept in place.
Turkey’s automotive exports were up 28% y/y to $2.57bn and steel exports rose 29% y/y to $966mn in May, but textile exports contracted 0.9% y/y to $1.41bn in the month.
The government is forecasting a foreign trade deficit of $60.7bn for this year with exports reaching $153bn and imports amounting to $214bn.
Turkey's Manufacturing Purchasing Managers' Index (PMI) rose from 51.7 in April to 53.5 in May - the highest level recorded since December 2013 - while new export orders increased at the second-fastest rate seen in over three years, IHS Markit said on June 1.
However, the central bank’s business sentiment survey stands in sharp contrast to the results of Markit’s PMI survey. Turkey’s business confidence index deteriorated in May, mainly due to a 15% m/m decline registered in the sub-index that measures export orders for the next three months. The deteriorating exports outlook also harmed real sector confidence in May.
Meanwhile, the capacity utilisation rate (CUR) of the Turkish manufacturing sector rose to 78.8% in May, the highest figure recorded since August 2013.