Foreign trade deficit shrinks further in May

ISTANBUL - Hürriyet Daily News

Turkey’s western port of İzmir is seen flooded with containers in this file photo. Hürriyet photo

The positive trend in Turkey’s narrowing foreign trade deficit, which contracted 27.3 percent in April, continued in May, according to Turkish Statistical Institute (TUİK) data revealed on June 29. The deficit contracted by 15.5 percent in May.

Turkish exports were up by 20.3 percent to $13.1 billion in May 2012, compared to the same month of 2011. Imports rose by 3.1 percent to $21.7 billion. The foreign trade deficit decreased 15.5 percent to $8.5 billion on an annual basis in May.

Calendar-adjusted exports increased by 16.4 percent and imports decreased by 1 percent compared with May 2011. Seasonal and calendar-adjusted exports decreased by 1.4 percent, while imports increased by 1.1 percent compared with the previous month.

The improvement in trade figures was reflected in the balance of exports and imports. In May 2012 exports constituted 60.5 percent of total activity, while the figure was 51.8 percent in May 2011.
In the first five months of the year exports recorded 12.7 percent rise, while imports decreased by 1.4 percent compared with same period last year.

Iran buys more gold

Iran topped the partner countries for gold exports. Gold has become a significant item of Turkish exports to the sanction-hit Islamic republic, with its savers opting for it over paper currency.

Exports to Iran rose by a whopping 513.2 percent in May to $1.6 billion, $1.3 billion of which was in gold.

Iran was followed by Germany ($1 billion), Iraq ($864 million), the United Kingdom ($692 million) and Russia ($575 million). 

EU share in exports

However, the eurozone debt woes continued to weigh on the European Union’s share in exports, which decreased to 36.2 percent in May from 46.8 percent in May 2011.

“As compared with the same month of the previous year, exports to the European Union were $4.76 billion, a decrease of 6.9 percent,” TUİK said.

The top country for Turkey’s imports in May was Russia ($2.2 billion) followed by Germany with $2 billion, China with $2 billion and the U.S. with $1.3 billion.

Precious metals 

Iran’s large import of gold has made the precious stones and metals category by far the highest value exported, at nearly $1.7 billion. It was followed by “vehicles other than railway or tramway rolling-stock parts” with $1.2 billion, and “iron and steel” with $1 billion.

The top category for imports was “mineral fuels and oils” with $4.8 billion.

The share of capital goods in imports in May dropped to 14.9 percent from 17.1 percent in May 2011, while the share of intermediary goods increased to 73.6 percent from 70.4 percent. The consumption goods share also fell from 12.3 percent to 11.3 percent.

As for exports, the share of manufacturing goods recorded a slight increase from 94.2 percent to 94.5 percent.

Meanwhile Citigroup, one of world’s leading banking groups, has revised its prediction for the current account deficit down for 2012 and 2013. The expected ratio of the current account deficit – which includes the improving figures in the foreign trade deficit – to gross domestic product has been lowered to 7.5 percent from 8.4 percent for 2012. The ratio has been lowered to 6.9 percent from 8 percent for 2013.