Turkey: Trade deficit hits record level with rising energy costs

According to the foreign trade data of the GTS (General trade system) for May, which was announced by TURKSTAT in cooperation with the Ministry of Commerce; Turkey’s exports increased by 15.3% to 18.98 billion USD in May 2022 compared to the same period of the previous year, while imports increased by 43.5% to 29.59 billion USD in the same period. Thus, the foreign trade deficit increased by 155.2% between May 2021 and May 2022 and became 10.61 billion USD. The ratio of exports to imports decreased from 79.8% to 64.2% in the said period.

While Germany was the country to which we exported the most in May, it was followed by the US, Iraq and Italy. Exports to 27 countries that make up the European Union increased by 17.8% and reached 8.03 billion USD, while the share of the EU in our total exports increased from 41.4% to 42.3%. In import items; Russia took the first place in May 2022, followed by China, Germany and the US. While the share of intermediate goods (raw materials) and consumer goods in total imports increased in May, the share of capital goods decreased. While the share of exports of high-tech products in our total exports was 2.4%, the share of the same group’s imports in our total imports was 8.9%.

According to STS (Special trade system), Turkey’s exports increased by 12.6% to 17.6 billion USD in May 2022 compared to the same period of the previous year, while imports increased by 40.8% to 27.19 billion USD in the same period. has taken place. The ratio of exports to imports was 64.7% in the said period.

Official data showed that Turkey ran a record high monthly trade deficit in May, driven by the rise in energy imports. Mineral oil and fuel imports, an indicator of Turkey’s energy bill, increased by 124% to $6.94 billion. Providing the majority of Turkey’s energy, Russia became the largest source of total imports. Steel and iron imports rose 32.9 percent to $3.1 billion in the same period. Motor vehicle exports rose 31.4% to $2.02 billion, indicating a revival of demand from Europe.

The Ministry of Commerce will release preliminary trade data for June in the coming days. The balances created by the economic effects of the Russia-Ukraine war on foreign demand increase downside risks. This not only increases imports over energy and commodity prices, but also reduces export potential by causing an economic slowdown in our main export markets. The potential for recession in European economies in the coming period may cause a slowdown in our exports.

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