Q1 trade defecit widened by 11%
Consumer goods imports up 10%
Not good news for government
Turkey’s trade deficit widened in the first quarter by 11 percent, paced by a jump in the import of consumer goods and muted growth in high value exports, fresh government data show.
Imports in the three months to March 31 rose more than 4 percent to almost $88 billion, while exports expanded by less than 3 percent over the same period last year, leaving a shortfall of $22.5 billion, according to data from the state statistics agency Turkstat this week.
Imports of consumer goods to Europe’s seventh-largest economy rose 10 percent, even accelerating in March to 12 percent.
While manufacturing dominated $65 billion of exports, one-third of the trade was in low technology industry products, and a little over one-third in higher technology goods. But products categorised as “high tech” accounted for less than 5 percent.
“In order for Turkey to make a meaningful jump in its economy, like South Korea, it should be able to produce high tech goods and export them,” economist Mustafa Sönmez told AGBI.
“This position is not changing much and we do not see a strategy to change this either.”
If Turkey had broadened its high tech industrial base, rather than focus on lower tech construction, or durable and non-durable consumer goods for export, it would be better positioned today to take advantage of changing market conditions brought about by the US import tariff-led reordering of the world’s global trade framework, Sönmez said.
The trade data will almost certainly be unwelcome news for the government, which has deployed relatively high interest rates and tightened credit availability in an effort to rein in consumer spending and reduce inflation, which stood at 38.1 percent at the beginning of April.
Also likely to be concerning for the government, imports of capital goods – equipment and materials used in production – fell almost 6 percent in the first quarter.
“It could have had exports to the EU but, also being in this situation Turkey would have been able to establish co-operation with China and Asia,” Sönmez said.
Turkey economic indicators
