Turkish exports as a proportion of economic output are less than half the ratio of investment grade countries, BGC Partners said.
Exports were “almost flat” at between 15 percent and 18 percent of GDP over the past decade compared with 40 percent for nations rated investment grade, Ozgur Altug, chief economist for BGC in Istanbul, said in an e-mailed report to clients today.
While the biggest achievement of Prime Minister Recep Tayyip Erdogan’s government has been to diversify Turkey’s exports, the “exports to GDP ratio did not improve much in the last 10 years,” he said.
Erdogan’s government, which is calling on ratings agencies to upgrade the country’s debt rating to investment from junk, is selling more goods to neighbors in the Middle East and North Africa after exports to European countries hurt by the financial crisis declined. A surge in imports last year widened the current account deficit to a record 10 percent of GDP.
Turkey should switch to more value-added products and alter its “production structure,” Altug said.
A surge in exports to Iran “are a natural outcome of the successful export diversification,” he said.
The share of intermediate goods in total exports climbed to 54 percent in the first seven months from 50 percent in the same period of 2011, Altug said in the report. The share of consumption goods fell to 36 percent from 38 percent and of capital goods to 9.4 percent from 11 percent.