Türkiye said Tuesday its exporters demonstrated strong resilience this year despite the global downturn and the devastating earthquakes that struck the country’s southeast earlier this year, reaffirming optimism about ending the year with record foreign sales.
Although the year didn’t start on a positive note, Türkiye saw a turnaround in exports from July onward, Trade Minister Ömer Bolat told the Türkiye Export Mobilization summit.
The event in the central province of Konya was organized by Türkiye’s leading media group and Daily Sabah’s parent company, Turkuvaz Media.
Bolat said exports so far this year have almost matched the figures from a year ago despite challenges such as the earthquakes and the contraction in global demand that began in the middle of last year.
The quakes that ripped through southeastern Türkiye in early February killed over 50,000 people, leveled hundreds of thousands of buildings and severely damaged the infrastructure.
The disaster resulted in a loss of about $6 billion in exports, Bolat said.
Outbound shipments from January through September fell 0.3% to $187.46 billion (TL 5.27 trillion), according to official data. Imports rose 1.3% to $274.76 billion.
The foreign trade deficit increased by 5% in the first nine months to $87.3 billion.
Bolat recalled exports hit records in August and September on a monthly basis, particularly stressing a 14% in services exports, which he said reached $63 billion and are expected to exceed $100 billion by the end of the year.
Still, he stressed a high foreign trade gap, stemming mainly from gold and automotive imports.
“We had a high deficit due to the increase in gold and automotive imports. We also lost our savings from energy imports due to the increase in gold and automotive imports,” said Bolat.
The minister said they had been closely following October exports, which he said have so far signaled around 4.5% compared to a year ago.
3rd straight record
Bolat expressed optimism that the country would still manage to end the year with all-time export figures.
“We will close the year with exports of $255 billion. At the beginning of the year, we set our target at $265 billion. Although we seem to be $10 billion below our target due to the issues I mentioned, we will have at least $355 billion in foreign exchange income this year along with service exports,” said the minister.
If achieved, it would mark the third consecutive yearly record in shipments.
Exports reached over $254 billion in 2022, lifting the previous record of nearly $225.4 billion in 2021. Sales were hit by the coronavirus pandemic and dropped to as low as $169.5 billion in 2020.
Bolat stressed that global demand is envisaged to rebound as of mid-2024, which he said will make a positive impact on Türkiye’s exports.
According to Bolat, the strong dollar has negatively impacted foreign trade due to its weight in imports. He also said the contraction in Europe, the country’s biggest export market, had largely dampened the demand.
“But we are hopeful. Economies never always get worse. There is a horizontal course, then it changes direction. I think that global demand will accelerate in the middle of 2024. This will also have a positive impact on exports,” Bolat said.
Skepticism about EU
Bolat expressed skepticism about the imminent start of Türkiye’s full membership negotiations, citing unfulfilled promises and agreements on the EU’s part.
“If there was a political will in the EU, these matters would have been successful. There is a very balanced structure in EU-Türkiye trade, and we are their seventh biggest foreign trade partner. We are not a dispensable country,” said the minister.
Bolat recalled their recent meetings in Brussels and said they had seen the desire from the EU to enhance economic and trade relations after the May elections, which secured President Recep Tayyip Erdoğan a third term.
“They expressed their intention to facilitate efforts regarding visa issues. They provided recommendations for countries facing transportation limits. We see the willingness to soften relations with Türkiye,” he noted.
He recalled Türkiye’s willingness to address the long-delayed modernization of the customs union agreement with the bloc. The EU-Türkiye Customs Union came into force in 1995 but is limited to industrial goods and processed agricultural products. A deeper trade agreement would be expanded to services, farm goods, and public procurement.
Bolat still said they “do not expect a development such as the acceleration or initiation of full membership negotiations in the near future.”
He said the fact that Erdoğan on Monday submitted a protocol for Sweden’s admission into NATO to Türkiye’s Parliament for ratification would make a positive contribution, “but how much remains to be seen.”
Source: Daily Sabah
