NEWS ECONOMY NEWS        29/07/2020

Turkey’s trade deficit is up 73.2% at USD 23.9 billion in first half of 2020

According to figures prepared by the Turkish Statistical Institute (TÜİK- TurkStat) in cooperation with Turkey’s Ministry of Trade, and using the General Trade System (GTS) calculation method, Turkey’s foreign trade deficit was USD 2,846 million in June 2020, 17% lower than the figure for the same month of the previous year, and also 17% lower than the deficit for the previous month of May 2020.

 

Exports totalled USD 13,462 million and imports totalled USD 16,308 million in June 2020. The export figure was a 15.7% increase and the import figure a 8.3% increase on the figures for the same month of the previous year. The export figure was 35.2% higher and the import figure 21.8% higher than the respective figures for the previous month of May 2020. The collapse of export and import figures in April and May was due to the coronavirus pandemic which forced most countries to introduce strict isolation procedures for their populations. Businesses throughout the world were forced to close down as demand for their goods or services evaporated. However, as the lockdown was gradually relaxed in June, so Turkey’s foreign trade activity returned to pre-pandemic levels. Foreign trade activity was 11.5% higher in June compared to the same month of the previous year, and was 27.5% higher than the figure for the previous month of May.

 

The June 2020 foreign trade results show a significant recovery on the previous two months. However, there are claims that the June 2020 results only show a temporary recovery on paper. Firstly, there is the calendar effect. The Ramadan holiday came in June last year and an extension to 9 days was provided by the government. If you discard weekends, there were only 15 working days in June 2019. This year the Ramadan holiday was in May and there were 22 working days in June. Therefore there were 7 more working days in June 2020. Secondly, following the lockdown in April and May, there will have been a gradual recovery in global trade which would have benefited Turkey’s foreign trade activity. Thirdly, there will have been a backlog of orders from April and May which would have been met in June. Imports in June were expected to decrease because of the large increases in import custom duties. This was indeed the case but did not show a comparative fall because of the extra 7 working days in June 2020.

 

For the first half of 2020, the trade deficit was USD 23,874 million, 73.2% higher than the figure for the same period of the previous year. Exports totalled USD 75,021 million and imports totalled USD 98,895 million in the first half of 2020. The export figure was a 15.1% decrease and the import figure a 3.2% decrease on the figures for the same period of the previous year.

 

The trade deficit for the year of 2019 was USD 29,512 million, a fall of 45.3% on the previous year. Total exports were USD 180,833 million, a 2.1% increase, and total imports were USD 210,345 million, a 9% fall on the figures for the previous year.

 

The automotive sector was again the leader in the export table in June 2020. Due to the coronavirus pandemic, automotive manufacturing plants had mostly been closed in the month of April, had reopened as from mid-May, and were again fully operational in June 2020. Automotive exports in June 2020, were USD 1,719 million, 12.8% of total exports, followed by machinery and equipment exports with USD 1,292 million (9.6% of total exports). Normal monthly automotive exports were over USD 2 billion and around 14-15% of total exports, and it is expected that automotive exports will return to their pre-pandemic level in coming months assuming that there will not be a second surge in the pandemic.

 

The energy sector has again lost its first place again in the imports table in June 2020, as in April and May 2020. Due to the coronavirus pandemic, production in Turkey’s industry had largely scaled down, roads were emptied of traffic, and the population had economised on use of home-use electricity and natural gas. The global energy markets had also seen upheaval and energy prices plummeted. The energy import figure consequently fell to USD 1,055 million in April 2020 and USD 1,293 million in May 2020, with a recovery in June 2020 with USD 1,573 million. The June 2020 figure was 9.6% of total imports, compared with 19% in the same month of the previous year. In June 2020, energy imports came in third behind precious metals (USD 2,395 million) and machinery and mechanical equipment (1,921 million). Global petrol prices are still depressed and it is expected that energy imports will only regain their previous position as the global economy gradually recovers pushing energy demand up, and as production levels in Turkey return to normal. 

 

Turkey’s exports to the EU, Turkey’s main trading partner, were USD 5,525 million in June 2020, 3.3% higher than the figure for the same month of the previous year and 34.6% higher than the previous month of May. There was clearly a backlog of exports accumulated from the coronavirus affected previous months resulting in higher exports in June. However, the share of total Turkish exports to the EU was 41% in June 2020 compared with 46% in the same month of the previous year, which shows exports to the EU continue were more adversely affected by the pandemic than to other countries. With regards the full year of 2019, Turkey’s exports to the EU were 42.4% of its total exports.

 

Germany, the EU’s largest economy, was the leading recipient of Turkish goods in June 2020, with USD 1,290 million. UK followed with USD 1,012 million, USA with USD 790 million, Iraq with USD 701 million, Italy with USD 628 million, and France with USD 602 million. With regards the full year of 2019, rankings were as follows: Germany (USD 16,624 million), UK (USD 11,281 million), Iraq (USD 10,224 million), Italy (USD 9,754 million), USA (USD 8,972 million), Spain (USD 8,141 million), and France (USD 7,946 million).

 

China was the leading exporter to Turkey in June 2020 with USD 1,935 million, followed by Germany with USD 1,527 million, Russia with USD 1,183 million, Iraq with USD 907 million, USA with USD 779 million, and Italy with USD 677 million.. With regards the full year of 2019, rankings were as follows: Russia (USD 23,117 million), Germany (USD 19,279 million), China (USD 19,128 million), USA (USD 11,847 million), USA (USD 9,349 million), France (USD 6,760 million), India (USD 6,635 million), South Korea (USD 5,777 million) and UK (USD 5,638 million).

 

The percentage of imports covered by exports was 82.6% in June 2020, compared with 77.2% in the same month of the previous year. With regards the full year of 2019, the percentage of imports covered by exports was 86%  compared with 76.6% in the previous year.

 

Using the Special Trade System (STS) calculation method of foreign trade, Turkey’s foreign trade deficit in June 2020 was USD 3,091 million, a decrease of 3.1% on the same month of the previous year. Exports were USD 12,745 million, an increase of 15.2% on the same month of the previous year, and imports were USD 15,835 million, an increase of 11.1% on the same month of the previous year. The deficit for the full year of 2019 was USD 31,239 million, with exports of USD 171,465 million and imports of USD 202,704 million.



Turkey’s net minimum wage has been raised 15.04% to TL 2,324.70 (USD 391) as of 01.01.2020       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s annual inflation rate falls back to 11.76% in July 2020       Turkey’s official unemployment rate increases marginally to 12.9% in May 2020       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 83,154,997 as of 2019 yearend       Foreigners visiting Turkey in 2019 increase by 14.1% to a record 45.1 million       Turkey’s private sector foreign debt is USD 189.8 billion as of 2019 yearend       Turkey’s economy grew by 0.9% in 2019