Trade deficit expands due to fall in gold sales

ISTANBUL - Reuters

Turkey’s exports increased to $11.5 million in January with a 11.2 percent increase from the same month a year earlier, as imports were worth $18.8 million with a 7.6 percent increase at the same period.

Turkey has posted a widening foreign trade deficit in the first month of the year according to figures revealed by state-run statistics body TÜİK yesterday, as gold sales to Iran continue to decline due to the sanctions imposed by the United States.

While the foreign trade deficit rose to $7.29 billion with a 2.4 percent increase in January from the same month a year earlier, exports and imports showed a hike in the same period. Exports reached $11.5 million with an 11.2 percent increase and imports were worth $18.8 million with a 7.6 percent increase in January compared to the same period in 2012.

However, Turkey’s gold sales to Iran through the United Arab Emirates (UAE), in return for its energy imports, continued to decrease in January. Turkey’s gold exports decreased to $466 million in January with an 18 percent fall from December 2012, as exports to the UAE reached $371 million, but Turkey did not make imports to Iran in January. On the other hand, gold exports were worth $570.9 million in December, with exports to Iran composing $10 million of the total and exports to the UAE registering at $402.7 million. Turkey’s energy imports fell to $4.6 billion with a 3.9 percent decrease.

Turkey used to pay the cost of natural gas imports from its second-largest supplier, Iran, to their account in Turkey’s Halkbank. Iranians were buying gold from Turkey with this cash. After the sanctions imposed by the U.S. in July, Iran started to bring the gold from Turkey to their country through the UAE.
 
Last year’s figures showed that Turkey’s gold exports jumped to $13.34 billion with an 805 percent increase from 2011. The final sanctions imposed in February have halted the gas-for-gold trade between the two countries. The U.S. claims that Turkey’s rising gold exports to Iran contributes financially to the country, which is allegedly carrying out a nuclear program.

Highest January export figures

Economy Minister Zafer Çağlayan said export figures were the highest in the month of January, speaking at the regular general assembly of the International Investors Association’s yesterday. “We’ve started the new year with a record... Turkey will reach exports worth $158 billion in its medium-term program target,” he said.

Çağlayan stressed that Turkey’s exports to the European Union would keep rising, as the amount increased to $4.83 billion in January from the same month last year with a 7.2 percent rise. The highest increase in exports was seen in South American countries, with a 46 percent increase in the same period, as Turkey has benefited from diversifying markets since 2009 after the global economic crisis, he added.

Germany imported the most good from Turkey compared to any other country at an amount worth $1 billion. Iraq ranked second with $884 million, followed by the United Kingdom with $664 million and the UAE with $614 million. However, Turkey imported the most from Russia at a value of $1.98 billion, followed by China, Germany and the U.S.

The largest export item was motor land vehicles, worth $1 billion, and the largest import product was mineral fuel and oil at $4.6 billion.