Turkey's foreign trade deficit narrows by 25 percent

ISTANBUL

Farm machinery is on display at an agriculture fair in the southern province of Mersin. Agriculture exports rose 9.6 percent. AA photo

The foreign trade deficit, a major soft spot in the Turkish economy, has continued to narrow in March, ahead of market expectations, according to tentative foreign trade data released by the Turkish Statistical Institute and the Ministry of Customs and Trade.

The foreign trade deficit decreased 25.3 in March 2012 compared with March 2011. Turkish exports increased 12.2 percent and reached $13.2 million, while imports decreased 4.8 percent and reached $20.6 million in March compared with the same month last year, bringing the foreign trade deficit from $9.8 million to $7.3 million.

The market expectation was $7.6 billion, according to a Reuters survey.

“We know that improvement in the current account deficit is still gradual. But data for the last five months, except for January, shows that the deterioration in the foreign trade deficit has come to an end,” said BGC Partners Chief Economist Özgür Altuğ in a note to investors. He said he expected the improvement in the foreign trade deficit to continue slowly except for a severe recession possibility, which means the foreign exchange demand in the markets will witness a limited decrease.

Calendar adjusted exports increased 12.2 percent and imports decreased 0.9 percent during the same period, while seasonally and calendar adjusted exports increased 0.1 percent and imports increased 4.3 percent from the previous month.

The figures represent the highest monthly exports to date, Economy Minister Zafer Çağlayan said in a written statement yesterday, before leaving for Dubai to attend an international investment conference, according to the Doğan News Agency. The improvement in foreign trade is based on increase in exports, he said.

Exports coverage of imports increased to 64.3 percent in March from 54.6 percent last March. The share of the European Union in total exports fell to 41.6 percent from 48.3 percent. The share of other countries in exports was up from 51.7 percent to 58.4 percent.

However, exports to Germany, Turkey’s largest exports market, increased by 3.4 percent. Germany was followed by Iraq, Iran, the United Kingdom and Italy. The top country for Turkey’s imports was Russia.

Motor land vehicles

Motor land vehicles were the highest exports item with a total value of $1.5 billion. The top categories for imports were “mineral fuels and oils” with a total worth of $5.3 billion.

Industrial manufacturing products constitute the majority of the March exports with 94.1 percent of the total. The figure was 93.6 percent in March 2011. The value of industrial manufacturing products rose to $12.4 billion in March from $11.6 billion in March 2011.The Agriculture Ministry said yesterday that agricultural exports rose by 9.6 percent to $4 billion in the same compared period.