Türkiye starts 2024 with record $20B exports in January

Turkish exporters picked up from where they left off in 2023 and achieved their best-ever start of the year in January, official data showed Friday.

Exports rose 3.6% year-over-year to over $20 billion, Trade Minister Ömer Bolat announced in the eastern province of Malatya.

“We set a record for the highest January exports in our history,” Bolat told an event to announce the preliminary foreign trade data.

Imports shrank by 22% to $26.2 billion last month, he said. The foreign trade deficit narrowed by 57% to $6.2 billion.

Bolat cited multiple factors behind the decline, including measures against unfair trade practices and dumping practices, more stable global energy prices, and the decrease stemming from the measures applied as of the second half of 2023, especially against the excessive increase in automotive and gold imports.

He said the export-to-import ratio increased by 18.9 points, reaching 76.4% in January.

The nation’s exports reached a third straight annual peak to a total of $255.8 billion in 2023, a 0.6% year-over-year increase from $254 billion in 2022.

Bolat said the record came despite multiple challenges, including the pair of devastating earthquakes that struck Türkiye’s southeastern region a year ago.

The disaster caused around $6 billion in export losses, the minister noted.

Other challenges included global tightening that curbed demand, including in the EU, Türkiye’s biggest export market, and geopolitical conflicts in the region.

Sales totaled $225.4 billion in 2021 after they were hit by the coronavirus pandemic and dropped to as low as $169.5 billion in 2020. The government’s medium-term program (MTP) estimate was set at $255 billion for 2023.

Bolat said the 12-month rolling exports reached $256.5 billion. The government sees shipments reaching $267 billion by the end of 2024.

At $361.8 billion, imports in 2023 also came below the program’s estimate of $367 billion.

The trade gap dropped to $106 billion, down 3.2% compared to $109.5 billion in 2022. The MTP estimated a shortfall of $112 billion.

Bolat said they aim to bring the shortfall to below $100 billion by the end of this year.

Türkiye’s share in global exports has reached 1.06%, Bolat said. The figure is up from 1.02% in 2022 and marks a major leap from just 0.55% back in 2002.

Exports are among the top priorities of the government it seeks to rely on to ensure sustainable economic growth.

Türkiye has embraced more conventional policymaking after the May elections and delivered aggressive monetary tightening aimed at arresting soaring inflation, reducing trade deficits, rebuilding foreign exchange reserves and stabilizing the Turkish lira.

Since June, the country’s central bank lifted its benchmark policy rate by 3,650 basis points to 45%. The bank said last month it completed its aggressive tightening cycle and said it would maintain current levels “as long as needed” to bring about the desired disinflation.

Inflation rose to nearly 65% in January and is expected to peak at 70%-75% in May before dipping to about 36% by the end of 2024 as tightening cools prices.

“While steadfastly combating inflation on one hand, we will continue our export-oriented development initiative,” said Vice President Cevdet Yılmaz, evaluating the trade data.

“By increasing domestic savings to reduce the current account deficit, we will implement structural reforms in line with our goal of accelerating green and digital transformation, creating a more productive and higher value-added economy,” Yılmaz wrote on social media platform X, formerly known as Twitter.

The data showed Germany remained Türkiye’s biggest export market, having received $1.76 billion worth of Turkish goods in January.

It was followed by the U.S. with $1.2 billion and Iraq with nearly $1.1 billion.

Most imports came from Russia at nearly $4 billion, followed by China at $2.9 billion and Germany at $1.92 billion.

Automotive topped the list among sectors with $2.78 billion worth of exports in January. The chemicals industry followed with nearly $2.3 billion, while ready-to-wear and electronics reported $1.4 and $1.2 billion in sales, respectively.

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