Friday, August 26, 2011
ISTANBUL - Hürriyet Daily News
After a record level of $10.2 billion in June, Turkey’s foreign trade deficit fell to nearly $9 billion last month. Still, the figure for the first seven months is 79.1 percent higher than the same period in 2010. Economists agree that the government should take structural measures to fight against the ever-growing deficit
 Russia topped the list of importers to Turkey with a 19.1 percent increase in July compared with the previous month. The country sold $2.06 billion worth of goods to Turkey in July. Imports from Germany were recorded as $1.89 billion followed by Italy. |
Turkey’s foreign trade deficit, a weak point in the fast growing economy, reached $9.01 billion in July, increasing 38.4 percent when compared with the same month last year, according to Turkish Statistical Institute, or TurkStat.
Despite a relative slow down over June data, Turkish economists remain cautious on the matter, calling for structural reforms to fight the gap.
“There is a slightly positive change in the data, but we will have to cautious about it,” economist Emre Alkin told the Hürriyet Daily News in a phone interview on Friday.
The July figure stood nearly $1.2 billion under June data, a record in nation’s history.
“It is too early to be pleased about the monthly decrease,” Alkin said, adding that a possible slowdown in production might be lying behind the slight drop.
Some 85 percent of the nation’s imports were composed of intermediate goods and raw materials. “The next few months’ results will show whether the government’s structural reforms worked well or not,” Alkin said.
The gap in the first seven months of the year touched $63 billion, with a 79.1 percent jump from nearly $35 billion in the same period of the last.
The export/import cover ratio also slumped, from 64.6 percent to 55.1 percent, according to the data.
Turkey’s total exports in June increased by 24.2 percent, compared with the previous month, and reached $11.9 billion. Imports in July were up 29.9 percent compared with the same month last year and were recorded as $20.8 billion.
Exports in the first seven months, meanwhile, increased 20.4 percent compared with the same period in 2010, reaching $77.4 billion. The January-July imports simultaneously jumped 41.3 percent to $140.5 billion. 2010 imports for the given period stood at $99.4 billion.
Commenting on the fresh data, Nurhan Toğuç, chief economist of Ata Invest, said she expected the downward trend in the current account deficit to continue in the second half of the year thanks to the decrease in the value of the Turkish Lira and oil prices.
“Russia- and China-dominated import items should be analyzed by the Turkish government to bring them down to more reasonable levels,” Toğuç said. “Unfortunately there is no balance in trade with many countries,” she said, adding that Turkey should work on producing some portion of the import items domestically.
“This can only be accomplished with structural reforms to support Turkish industrialists through incentives,” she said. According to her, if Turkey’s trade deficit continues to increase rapidly, “volatility of the Turkish economy from the global shocks could rise.”
Noting that Turkey’s monthly trade deficit in the last nine months floated above $7 billion, “These records are unbearable and not sustainable for the Turkish economy,” said Salim Somçağ, an Istanbul-based independent economist.
Recalling that Turkey’s export/import cover ratio was around 70 percent in 2009, Somçağ told the Daily News that today’s ratio stood at only 55.1 percent.
According to him, the slowdown in June’s deficit compared with the previous month was mostly caused by a global cooling. “June’s trade deficit will add $5 billion to country’s current account deficit, bringing it to $74 billion by the end of June,” he said.
Germany: biggest trade partner
Germany remained as Turkey’s biggest export market with a 23 percent increase in June over the previous month, reaching $1.3 billion. Turkey’s exports to the United Kingdom also rose and hit $785 million. Italy followed with $739 million, Iraq with $656 million and France with $604 million.
Russia topped the list of importers to Turkey with a 19.1 percent increase in June compared with the previous month. Russia sold $2.06 billion worth of goods to Turkey last month. Imports from Germany were recorded as $1.89 billion followed by Italy with $1.25 billion.
Despite a relative slow down over June data, Turkish economists remain cautious on the matter, calling for structural reforms to fight the gap.
“There is a slightly positive change in the data, but we will have to cautious about it,” economist Emre Alkin told the Hürriyet Daily News in a phone interview on Friday.
The July figure stood nearly $1.2 billion under June data, a record in nation’s history.
“It is too early to be pleased about the monthly decrease,” Alkin said, adding that a possible slowdown in production might be lying behind the slight drop.
Some 85 percent of the nation’s imports were composed of intermediate goods and raw materials. “The next few months’ results will show whether the government’s structural reforms worked well or not,” Alkin said.
The gap in the first seven months of the year touched $63 billion, with a 79.1 percent jump from nearly $35 billion in the same period of the last.
The export/import cover ratio also slumped, from 64.6 percent to 55.1 percent, according to the data.
Turkey’s total exports in June increased by 24.2 percent, compared with the previous month, and reached $11.9 billion. Imports in July were up 29.9 percent compared with the same month last year and were recorded as $20.8 billion.
Exports in the first seven months, meanwhile, increased 20.4 percent compared with the same period in 2010, reaching $77.4 billion. The January-July imports simultaneously jumped 41.3 percent to $140.5 billion. 2010 imports for the given period stood at $99.4 billion.
Commenting on the fresh data, Nurhan Toğuç, chief economist of Ata Invest, said she expected the downward trend in the current account deficit to continue in the second half of the year thanks to the decrease in the value of the Turkish Lira and oil prices.
“Russia- and China-dominated import items should be analyzed by the Turkish government to bring them down to more reasonable levels,” Toğuç said. “Unfortunately there is no balance in trade with many countries,” she said, adding that Turkey should work on producing some portion of the import items domestically.
“This can only be accomplished with structural reforms to support Turkish industrialists through incentives,” she said. According to her, if Turkey’s trade deficit continues to increase rapidly, “volatility of the Turkish economy from the global shocks could rise.”
Noting that Turkey’s monthly trade deficit in the last nine months floated above $7 billion, “These records are unbearable and not sustainable for the Turkish economy,” said Salim Somçağ, an Istanbul-based independent economist.
Recalling that Turkey’s export/import cover ratio was around 70 percent in 2009, Somçağ told the Daily News that today’s ratio stood at only 55.1 percent.
According to him, the slowdown in June’s deficit compared with the previous month was mostly caused by a global cooling. “June’s trade deficit will add $5 billion to country’s current account deficit, bringing it to $74 billion by the end of June,” he said.
Germany: biggest trade partner
Germany remained as Turkey’s biggest export market with a 23 percent increase in June over the previous month, reaching $1.3 billion. Turkey’s exports to the United Kingdom also rose and hit $785 million. Italy followed with $739 million, Iraq with $656 million and France with $604 million.
Russia topped the list of importers to Turkey with a 19.1 percent increase in June compared with the previous month. Russia sold $2.06 billion worth of goods to Turkey last month. Imports from Germany were recorded as $1.89 billion followed by Italy with $1.25 billion.
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