Turkey: August trade deficit of $11.2 billion

According to the August GTS (General trade system) foreign trade data announced by TURKSTAT in cooperation with the Ministry of Commerce; Turkey's exports increased by 13.1% in August 2022 compared to the same period of the previous year and became 21.34 billion USD, while imports increased by 40.4% to 32.53 billion USD in the same period. Thus, the foreign trade deficit increased by 159.9% between August 2021 and August 2022 and became 11.19 billion USD. The ratio of exports to imports decreased from 81.4% to 65.6% in the said period. In the January-August period, the foreign trade deficit increased by 146.3%.

While Germany is the country we export to the most in August, it is followed by the US, Iraq and England. Exports to 27 countries that make up the European Union increased by 3% to reach 8.02 billion USD, while the share of the EU in our total exports decreased from 41.3% to 37.6%. In import items; Russia took the first place in August 2022, followed by China, Germany and Switzerland. In August, while the share of consumption goods in total imports increased (8.8%), the share of capital (investment) goods decreased. The increase in investment goods was 33.9%, the highest level since June 2021. Looking at the sub-items of imports of investment goods, imports of semi-durable goods increased by 46.1%, while imports of durable consumption goods increased by 33.2%. Non-durable goods imports, on the other hand, increased by 10.9% in August.

Since Turkey's industry and export structure still has the weight of importing intermediate goods and exporting the final goods after assembly, we closely monitor the share of intermediate goods in total imports. The share of intermediate goods imports in total imports remained at the level of 79.5%. Imports of intermediate goods increased by 40.4%, while imports of non-energy intermediate goods increased by 21.7%.

While exports excluding energy products and gold continued to increase by 9.3%, imports in the same category increased by 16.6% at a higher rate. When we consider energy as an external item, the trend on the side of basic goods is important in terms of ensuring the current account surplus at the center of the investment, employment and growth perspective declared by the government at the end of 2021, but we can say that the foreign trade deficit seems far from this target at the moment.

According to STS (Special Trade System), Turkey's exports increased by 9.7% in August 2022 compared to the same period of the previous year and reached 19.54 billion USD, while imports increased by 37.5% to 30.75 billion USD in the same period. has taken place. The ratio of exports to imports was 63.6% in the said period.

When we evaluate the data, we observe that the slowdown in exports and the strong increase in imports continued in August as well. In this context, the foreign trade deficit widens and causes Turkey's current account deficit to deepen. It is observed that this deficit is not only due to energy, but also higher import growth in non-energy items. Although it is a positive point that we have a surplus on the core basis in terms of current account balance, it can be said that the potential that can be seen in the core goods side, especially within the scope of the slowdown in exports, is currently negative.

The slowdown in exports to developed market trading partners causes the foreign trade deficit potential to not progress positively. Stress will continue to increase on the EU side, energy prices are likely to increase, and if we consider the dollar-based import cost structure, developments in foreign exchange and parities (especially Euro/dollar) create risks. The impact of geopolitical problems will continue to be determinant on energy prices. The potential for cooling in domestic demand may limit the potential for consumer goods, but we are yet to receive the sign of a complete cooling. If macroprudential measures force a little more private consumption, the slowdown in domestic demand may reduce imports a little, but since this will be on a core basis, we do not expect a rebound effect on headline data, including energy.

Despite the recent decrease in oil prices, inflationary pressures, parity movements caused by the global environment, and problems such as freight and logistics, which have a negative impact on foreign trade volume, may have an impact on our current account balance and growth profile through foreign trade. Based on current and upcoming trade figures, Turkey's 12-month C/A deficit is expected to increase to an estimated US$37 billion by July 2022. As Tera Yatirim, we expect a total C/A deficit of US$ 50 billion, which is more than 6.5% of GDP, for 2022.

Kaynak: Tera Yatırım-Enver Erkan
Hibya Haber Ajansı