Turkey posts narrowest trade deficit in five years

Hurriyet Daily News with wires

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Turkey’s trade deficit narrowed in January to its lowest level in more than five years as demand for foreign goods fell and reduced oil costs cut the country’s import bill.

The trade gap contracted to $1.4 billion, down from $5.7 billion a year earlier, the statistics agency in Ankara reported on its Web site Friday. The deficit was forecast to be $2.7 billion, according to the median estimate of eight economists surveyed by Bloomberg.

This narrowing comes after the economy grew at its slowest pace in six years during the third quarter of 2008, amid waning European demand for Turkish-made goods such as cars and washing machines. Falling global energy prices are also helping reduce the current-account gap, the broadest measure of trade, which peaked on a 12-month rolling basis at $49 billion on the year through August 2008.

"We are seeing a very serious economic contraction that will extend through the year," said Ozan Gazitürk, an economist for Istanbul lender Şekerbank, who forecasts an end-2009 current-account gap of about $20 billion. "Much lower commodity prices are adding to the effect."

Crude-oil prices were around $40 a barrel in January, compared to $90 a barrel a year earlier. Imports of mineral fuels fell 34 percent, to $2.5 billion, in January from the previous year, the statistics agency said. Exports decreased 26 percent, to $7.9 billion, while imports decreased 43 percent to $9.3 billion, their lowest level in more than three years.

Analyst Timothy Ash at the Royal Bank of Scotland said the figures represented a trend being repeated across the region and emphasized the scale of the "de-globalization" process going on. "In Turkey, domestic demand for imports has slowed very significantly," he said. "Clearly, Turkey is also benefiting enormously from lower oil and energy prices; each $1 drop in the oil price saves Turkey around $400 million in imports."

Turning to neighbors

"When the European Union, which buys 51 percent of our exports, is in recession, this kind of picture is inescapable," Foreign Trade Minister Kürşad Tüzmen said on the CNBC-e television channel after the figures were released. "We are trying to compensate by turning to our neighbors where demand is still high."

Exports to the European Union, or EU, fell 38 percent from the previous year, to $3.4 billion, while sales to the rest of the world declined 13 percent, to $4.5 billion, the statistics agency said Friday.

Istanbul, the largest city in Turkey and the fourth largest in the world, was largely responsible for what success the country did enjoy, pulling most of Turkey’s weight in foreign trade implemented within the last year, reported the Anatolia news agency.Some $73.2 billion in exports from Istanbul comprised 55.4 percent of last year’s total exports. The city’s imports totaled $111.2 billion, accounting for 55.1 percent of the national total.Some 13 Turkish cities had more than $1 billion in exports Ğ 91.1 percent of the country’s total Ğ while 12 cities surpassed $1 billion in exports, accounting for 95 percent of the national total. Istanbul, Bursa (with nearly $11.1 billion in total exports last year), Kocaeli (almost $8.3 billion), İzmir ($7.8 billion), Ankara ($5.3 billion), Gaziantep ($3.3 billion), Sakarya, Denizli, Hatay and Adana were among the leading cities for exports.The top importers were Kocaeli and Ankara, with $25.4 billion and $23.1 billion, respectively, in imported products. Bursa ($8.7 billion), İzmir ($8.2 billion) and Gaziantep ($2.7 billion) followed those cities on the top-importers list.

According to Undersecretariat of Foreign Trade data, the number of exporters in Turkey dropped to 48,027, while the number of importers fell to 57,644.