According to the October GTS (General trade system) foreign trade data announced by TURKSTAT in cooperation with the Ministry of Commerce; Turkey’s exports increased by 20.1% in October 2021 compared to the same period of the previous year and became 20.79 billion USD, while imports increased by 12.8% to 22.23 billion USD in the same period. Thus, the foreign trade deficit decreased by 40.1% between October 2020 and October 2021 and became 1.44 billion USD. The ratio of exports to imports increased from 87.8% to 93.5% in the said period.
While Germany is the country we export to the most in October, it is followed by the US, England and Iraq. Exports to 27 countries that make up the European Union increased by 18.7% and reached 8.57 billion USD, while the share of the EU in our total exports decreased from 41.7% to 41.2%. In import items; In October 2021, China took the first place, followed by Russia, Germany and the US. In October, the share of intermediate goods (raw materials) in total imports increased, while the share of capital and consumption goods decreased. While the share of exports of high-tech products in our total exports was 2.7%, the share of the same group’s imports in our total imports was 11.8%.
According to STS (Special trade system), Turkey’s exports increased by 20.7% to 19.83 billion USD in October 2021 compared to the same period of the previous year, while imports increased by 15.3% to 21.60 billion USD in the same period. has taken place. The ratio of exports to imports was 91.8% in the said period.
Along with the shrinking foreign trade deficit within the framework of the strong export outlook, the improvement trend in the current account balance continues. The decrease in the effects of the epidemic on commercial activities, the improvement in foreign demand and the easing in travel restrictions provided a positive trend in exports of goods and services, especially in the second half of the year. In this context, we observe the positive effects of export and tourism revenues on the current account balance and the periodic surplus in the balance sheet. We expect to see these improvement effects in the current account balance data in October as well. We expect a periodic current account surplus of 1.8 billion USD for October, and a current account deficit of 14 billion USD throughout the year. In this context, we expect the current account deficit / GDP ratio to be 2.1%, within the framework of our annual real GDP growth expectation of 9.7%. We would like to state that the risks regarding the current account deficit are on the downside due to the fact that consumption-based import volume may decrease as a result of the recent sharp depreciation in the lira, gold imports are below average levels, and the positive contribution of the tourism sector.
However, we think that the reverse risks on the current account balance should be followed, especially in the context of developments related to the latest Omicron variant. In addition to the supply chain crisis, which emerged as an aftermath of the problems caused by the Covid 19 epidemic on the global trade volume, factors such as demand shock against possible closures, travel restrictions should be the subject of a stress test in terms of the balance of payments scenario. On the other hand; Losing momentum in the industry both in terms of supply of intermediate goods and increasing production costs is also one of the possible risks. Although the threshold value is preserved on the manufacturing PMI side, which will be updated in November on Wednesday, a slowdown is observed towards 51.2 in October. This means an ongoing slowdown from 54 levels in the summer months. Therefore, the 4Q21 growth momentum may periodically lag behind the previous quarters. 2022 GDP growth, in addition to global Covid and supply-related risks; The lira, which is constantly losing value due to portfolio outflows and dollarization, carries a downside risk due to factors such as the demand imbalance effect of the corresponding rising inflation. Considering that the increase in bond rates and CDS did not provide the easingaimed with rate cuts, we would like to point out the compelling effect of the financial market pressure on the sustainability of macroeconomic balances to a serious policy tightening as a factor of reservation. Therefore, the increased risk premium appears as a handicap for the easing of financial conditions. In this context, although we still set our expectation for 2021 GDP growth to be 9.7%, our expectation for 2022 GDP growth of 4.1% includes downside risks.
Kaynak Tera Yatırım-Enver Erkan
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
