Foreign trade deficit continues to shrink

Turkey’s foreign trade deficit has continued to decrease since the start of the New Year. According to recently released data based on the month of May, the monthly foreign trade deficit has now become $7.1 billion. The data highlights how the foreign trade deficit has continued to shrink in the last couple of months, from $92.2 billion at the end of April to $89.4 billion at the end of May.

As of the end of May, the total foreign trade deficit of the first five months of the year has decreased by 24.9 percent to $31.6 billion, highlighting the continued decrease in the deficit over a five month period.  

The foreign trade deficit in the month of May decreased by 43.3 percent to $3.2 billion; the foreign trade deficit, excluding gold, dropped to $6.5 billion, 20.8 percent lower compared to last year. 

Accompanying these positive developments, exports in May increased by 3.6 percent while imports shrank at a high rate of 11.5 percent. A rise of 12.9 percent in textile and clothes exports in May and a 13.5 percent rise in motor vehicles exports are other areas that stood out.

When we look at imports, we see a decrease of 10.3 percent in intermediate goods, 5.5 percent in capital goods and 7.6 percent in consumer goods.

The decreases are mainly due to the increase in exports to European economies, mainly due to signs of a revival in the region, and the continuing decrease in domestic demand. In other words, whether or not the narrowing in the foreign trade deficits will continue completely depends on the course of these developments. Again, in the case of the domestic demand recovering, mainly due to the upcoming elections, there are serious risks foreseen such as hikes in imports and the cost of exports increasing...