Turkey’s foreign trade gap narrows upon slump in oil prices, rise in gold exports

ISTANBUL - Reuters

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Turkey’s foreign trade deficit narrowed in January to $4.31 billion, a 37.5 percent decrease from the same month of the previous year, due to the decrease in oil prices and the rise in gold exports, mainly to Switzerland.

According to data revealed by the Turkish Statistics Institute (TÜİK) on Feb. 27, exports slightly declined to $12.33 billion in January and imports to $16.64 billion, a 0.6 percent and 13.7 percent decrease, respectively, from the same month of the previous year.

Analysts said Turkey’s gold trade needs to be followed closely now, as there were sharp fluctuations in the country’s total trade balance between 2012 and 2013.

Due to the sanctions imposed on Iran, Turkey paid the oil and gas imports from the country via a number of Turkish Lira accounts at Halkbank before Iran converted this money into gold or transferred it to its own bank accounts in Iran via several bank accounts in the United Arab Emirates or Switzerland.

Due to such transfers, Turkey made record-high gold exports in 2012. The country’s $13.3 billion worth of gold exports in 2012 regressed to $3.3 billion in 2013, while its gold imports rose from $7.6 billion in 2012 to $13.75 billion in 2013.

“We saw around $1.7 billion worth of improvement in Turkey’s foreign trade gap in January from the previous year, mainly due to the decrease in oil prices. Yet, an additional $1 billion worth of gold exports to Switzerland seem to enable the country to reach around 37.5 percent improvement in its foreign trade gap, much higher than the expectations at around 10 percent,” said an economist from Oyak Investment, Mehmet Besimoğlu.

According to the TÜİK data, the share of the exports to the EU decreased from 44 percent in January 2014 to 42.7 percent in January 2015. The country made around $5.27 billion worth of exports to the EU in January 2015, a 3.4 percent decrease from the same month of the previous year.

Turkey made the most exports, worth around $1.11 billion, to Germany in January 2015, followed by Switzerland with $1.05 billion, Britain with $944 million and Iraq with $837 million, the data showed.

Turkey made some 32 tons of gold worth around $1.3 billion in total in January 2015, 24 tons of which were exported to Switzerland for around $982 million.