Turkish exporters’ shipments reached a record high in July, a top official said on Friday, maintaining an upward trend that has helped lower the country’s foreign trade deficit.
Exports rose 13.8% from a year ago to $22.5 billion (TL 746.87 billion), Trade Minister Ömer Bolat told a meeting in the central province of Kayseri to announce the preliminary figures.
“I am proud to say that we have achieved the highest July exports in history. We achieved a 13.8% increase compared to July last year, when the figure was $19.8 billion. Thus, we achieved an increase of $2.7 billion,” the minister said.
The growth is larger than Bolat estimated earlier in the month, foreseeing a similar decline in imports.
Imports dropped by 7.9% in July to $32.3 billion, the official data showed. Bolat said necessary and essential imports are still being made but said the government is combating purchases from abroad that could endanger Turkish industries.
These efforts helped narrow the foreign trade deficit by 42.3% year-over-year to $7.2 billion in July, Bolat said, stressing that the decline contributed positively to macroeconomic stability and economic growth.
Treasury and Finance Minister Şimşek stressed the balancing in foreign trade, saying the annual gap improved by $5.3 billion compared to the previous month and by $38.8 billion from a year ago.
“We expect a significant decrease in the annual current account deficit in July. By complementing cyclical factors with structural reforms, we aim to make our sustainable current account deficit and gains in reserves permanent,” Şimşek wrote on social media platform X.
Exports are among the priority areas that the Turkish government is seeking to rely on as they rebalance the economy’s growth composition.
As part of its economic program, Türkiye introduced measures to cap strong domestic demand – one of the main reasons for higher imports – and to boost investments and exports to improve the current account balance.
Flipping the chronic current account and trade deficits into surpluses is high on the agenda since the government started reversing years of loose monetary policy after last May’s presidential and parliamentary elections.
Authorities have delivered aggressive monetary tightening over the past year to cool demand and rein in inflation, which eased to 71.6% in June on an annual basis, marking the first drop in eight months.
Exports-imports coverage ratio came in at 75.7%, improving from 61.2% in July 2023.
From January through July, exports amounted to $148.8 billion, up 4.1% year-over-year, while imports fell by 8.4% to $198.6 billion.
The seven-month trade deficit narrowed by 32% from a year ago to $49.8 billion, according to the data.
“The gap in the first seven months of last year stood at $74 billion; our foreign trade deficit has declined by $24 billion,” said Bolat.
The 12-month rolling exports also hit a record, reaching $261.5 billion, an increase of 3.4% on a yearly basis, according to the minister.
The government, as part of its medium-term program, had set an export target of $267 billion for 2024. Shipments hit a record $256 billion in the whole of 2023.
“In May, we reached $260.1 billion. In June, due to the nine-day long holiday and calendar effects, there was a slight decline in our exports and imports, which was normal. However, in July, we made up for that difference and went back into positive territory,” said Bolat.
“This means that our total goods exports have increased by 3.4% over the past year. In the last year, we have achieved a net increase of $8.7 billion.”
Unless there are new tensions, conflicts or disruptions in regions that are significant markets for Türkiye, Bolat said they are confident they would reach the year-end target.
“If we can add approximately $750 million to $1 billion each month compared to last year’s figures, achieving this goal will not be difficult,” he noted.
Bolat referred to expectations for interest rate cuts in the European Union, the United States, and the United Kingdom from September onward, which he says could translate into opportunity for Turkish exporters.
Automotive industry spearheaded the July exports with $3.1 billion worth of shipments, the data showed. It was followed by the chemicals sector and ready-to-wear at $2.6 billion and $1.7 billion, respectively.
