Turkey: October trade deficit of $7.87 billion

According to the October GTS (General trade system) foreign trade data announced by TURKSTAT in cooperation with the Ministry of Commerce; Turkey's exports increased by 3% in October 2022 compared to the same period of the previous year and became 21.3 billion USD, while imports increased by 31.4% to 29.2 billion USD in the same period. Thus, the foreign trade deficit increased by 421.7% between October 2021 and October 2022 and became 7.87 billion USD. The ratio of exports to imports decreased from 93.2% to 73% in the said period. In a 12-month total, the foreign trade deficit, which was 96.7 billion dollars in September, increased by 422% compared to the same month of the previous year and reached 103.3 billion dollars in October.

In October, the country we exported to the most was Germany, followed by Iraq, the US and Russia. While exports to the 27 countries that make up the European Union decreased by 3.4% to 8.3 billion USD, the share of the EU in our total exports decreased from 41.3% to 38.7%. In import items; Russia took the first place in October 2022, followed by China, Switzerland and Germany.

While the share of intermediate goods (raw materials) in total imports (79.3%) and capital (investment) goods (11.5%) decreased in October, the share of consumption goods (9.1%) increased. In this period, imports of consumption goods increased by 39.3% on an annual basis due to the impact of passenger cars and fuel products, while investment goods increased by 26% with the help of the acceleration in industrial transportation vehicles and equipment. While imports of intermediate goods grew by 31.4%, annual growth lost pace compared to previous months due to the decline in international crude oil prices.

The growth in both the energy and non-energy deficits in October indicates that the growth in the foreign trade deficit has spread to the whole. Exports excluding energy and gold increased by 1% in October compared to the previous month, while the increase in imports in the related category was 12.8%.

Turkey's 12-Month Foreign Trade Balance, Million USD. Source: TURKSTAT, Ministry of Trade, Tera Yatırım…

We see the effect of the slowdown in demand indicators in both import and export figures. However, the significant slowdown in foreign demand has a more significant negative impact on exports. We do not expect a positive external economic performance due to the expected recession wave, especially in Europe, our main trading partner. For this reason, we can see the export-limiting effects of this in the upcoming period as well. While the contribution we will get from exports will probably be limited if the deceleration in developed economies, especially the EU, and in addition, if the TL remains stable, we still expect the price effect to be the determining factor in the balance on the import side. The global inflationary environment, especially energy and raw material prices, may cause us to continue to be exposed to high import bills. The future course of the variables in this area, especially oil prices, is important. On the consumption-based import side, the slowdown in domestic demand may have some stabilizing effect. In the light of all these balances, we expect the high course of the foreign trade deficit to continue in the coming months.

Kaynak: Tera Yatırım-Enver Erkan
Hibya Haber Ajansı