Turkey’s foreign trade deficit fell by 37.5% y/y to $4.31bn in January, less than the market consensus forecast of $4.6bn, as exports dropped by 0.6% y/y to $12.3bn and imports decreased 13.7% y/y to $16.6bn, the statistics office TUIK said on February 27.

Consumption goods imports were down 11.1% y/y, intermediate goods imports fell 16.4% y/y and capital goods imports exhibited a 1.1% y/y in January, suggesting weak domestic activity but also possibly reflecting the effects of weaker currency.

Calendar-adjusted exports fell 0.3% y/y while calendar & seasonally adjusted exports rose 7.1% m/m in January after edging up 0.1% m/m in the previous month. Calendar adjusted imports were down 11.3% y/y and calendar & seasonally adjusted imports fell 2.9% m/m versus the 8.5% m/m decline in December.

However, the recent depreciation of TRY, apparently, is not helping Turkey. Exports to the EU fell by 3.4% y/y to $5.3bn, sales of goods to Africa were down 18.6% y/y and shipments to the Middle East declined 2.6% y/y in January. The EU’s share in Turkey’s total exports dropped to 42.7% in January from 44% a year ago.

Turkey’s exports to Germany, the largest market for Turkish companies, fell 11.6% y/y, and exports to Iraq, once Turkey’s second largest market, were down 17.7% y/y in January. Iraq is now Turkey’s fourth largest export market with $837mn worth of export volume, after Switzerland ($1.05bn), and the UK ($944mn), data showed.

Exports of precious metals (mostly gold) soared 218% y/y to $1.7bn while precious metals imports fell by 36.5% y/y to $288mn in the month. Turkey paid $3.7bn for energy imports in January, translating into a 24.5% y/y decline.

The government forecasts $173bn exports, $258bn imports and a foreign trade deficit of $85bn this year.