WHY IS THE ECONOMY OF TURKEY SINKING? TRADE DEFICIT – MAJOR CAUSE OF CONCERN

                                 MARKET SCENARIO OF TURKEY – 2022

According to Turkey trade Data for the year 2022, the country’s trade deficit rose by 160% yearly and reached USD 11.2 billion in the month of August 2022. The reason behind this surge is the growth in total imports of the country. The imports of the nation grew by 40% in the year 2022 as per the reports released by the statistical institute of Turkey.  As per the Turkey Trade Data of the same year, the trade deficit of the country grew by approximately 146% and reached USD 73.45 billion in only the initial 8 months of the year 2022.

The total imports grew and reached USD 32.5 billion, whereas the exports rose and touched a mark of USD 21.3 billion.

As per the economic program of the previous year, 2021, the aim of Turkey was to shift to a current account surplus through powerful and effective exports while reducing the interest rates. The country was supposed to do this even if the inflation was growing at that time or their currency value was fluctuating. External factors like the rise in prices of global energy and product pricing made this goal of Turkey unattainable.

LET’S UNDERSTAND STATISTICS AND DERIVE INSIGHTS

If we talk about the total exports made by the country as mentioned in Turkey Export Data of October month of the year 2022, then they would be close to USD 19.5 billion, on the other hand, based on Turkey Import Data for the same time frame, country imported goods worth USD 27.5 billion. Hence, this led to a negative trade balance or a trade deficit of USD 8 billion. On comparing these values with the values of October 2021, then it is clearly seen that exports have declined by USD 250 million, whereas imports have grown by USD 5.9 billion.

 

 

 

MAJOR GOODS EXPORTED AND IMPORTED IN THE NATION

Although numerous goods were exported from Turkey to the world, as per Turkey Export Data for the month of October 2022, the major items exported by the nation were:

·        Automobiles (USD 2.3 billion)

·        Nuclear reactors and appliances (USD 1.85 billion)

·        Iron and steel (USD 1.25 billion)

·        Mineral fuels and oils (USD 1.13 billion)

·        Electrical machinery and equipment (USD 1.10 billion)

Numerous items were imported also to Turkey which led to a negative trade balance in the nation. Some of those goods as per Turkey Import Data were:

·        Mineral fuels and oils (USD 8.5 billion)

·        Nuclear gadgets and reactors (USD 3 billion)

·        Precious stones and jewelry (USD 2.80 billion)

·        Electrical machines (USD 1.88 billion)

·        Iron and steel (USD 1.80 billion)

MAJOR TRADE PARTNERS OF THE NATION

In the month of October 2022, Turkey exported most of its goods to Germany, the United States, the United Kingdom, Iraq, and Russia. Whereas Turkey imported majorly from Russia, China, Switzerland, and Germany.

REASON BEHIND THE GROWTH OF IMPORTS AND THE DECLINE IN EXPORTS

The major reason behind the decline in exports is due to the reduced selling of goods to countries like Saudi Arabia, Iraq, and the Netherlands and low exports of goods like mineral fuels and oils, automobiles, and sea vehicles like boats, and ships.

Imports rose as the purchasing power of Turkey grew in countries like China, France, and Germany along with the goods like automobiles, Iron and steel, and nuclear reactors and gadgets.

 

 

CONCLUSION

In the end, we would like to conclude by stating that Turkey has a high potential to grow and expand in the international market and can cover this trade deficit in a few years if a proper import and export strategy is formed. As per our estimates, Turkey would come out of this negative trade balance economy to a healthy economy.

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