Turkish trade gap narrows less than expected on Iraqi tumult

Turkey’s foreign trade deficit continued to contract in June, albeit at a slower-than-expected pace, due to a massive blow to Iraqi exports after an Islamic militant offensive.

According to figures announced by the Turkish Statistical Institute (TÜİK), the country’s trade deficit narrowed by 8.8 percent to $7.85 billion, but failed to meet market expectations that were hovering around $7.1 billion.

The main factor behind the gap coming above expectations was the remarkable decline in Turkey’s exports to Iraq, which declined by almost 20 percent during the month.

Despite the Iraqi affect, exports manage to rise 4.2 percent to $12.92 billion, while imports dropped slightly by 1.1 percent to $20.78 billion.

The TÜİK data released July 25 showed that exports to Iraq plummeted by 19.3 percent to $745 million in June.

Iraq, which had become Turkey’s second biggest trade partner after Europe, has been gripped by a whirlwind of violence and political turmoil since the Islamic State of Syria and the Levant (ISIL) seized the second largest Iraqi province, Mosul, on the night of June 9.

The absence of a powerful political authority and safety fears for Turkish transporters that escalated after militants took dozens of Turks hostage have taken a great toll on trade between the countries.

ISIL stormed the Turkish Consulate on June 10, taking all 49 there hostage, including Turkish Consul General Özturk Yılmaz.

A separate group of 41 truck drivers who were taken hostage in the country were released at the beginning of the month, but the consulate hostages remain in jihadist captivity, keeping tensions high.