- Exports fall to $9.6 billion in January; lira strengthens
- Decline led by falling shipments to neighboring Russia, Iraq
Turkey’s exports fell to a five-year low as shipments to neighboring countries that are beset by fighting and economic crisis plunged.
Exports dropped to $9.6 billion in January, with sales to Russia and Iraq plummeting, Turkey’s state statistics institute in Ankara said on its website Monday. Turkey’s trade gap shrank to $3.76 billion from $4.34 billion during the same period, due to the lower cost of importing energy.
The improvement in Turkey’s foreign trade imbalance is hiding the troubles its manufacturers are facing. Russia, which used to be Turkey’s seventh-largest export partner in 2014, wasn’t even among the top 20 last month, as exports fell to around $107 million, nearly a third of what it was a year earlier. Shipments to Iraq, where parts of the country is under Islamic State’s control, fell 44 percent from a year ago.
“Geopolitical problems in neighboring countries are the main reason behind the fall in Turkey’s exports,” Oyak Menkul Degerler’s Istanbul-based chief economist Mehmet Besimoglu said by phone. “Although the ongoing improvement in the trade deficit is good for Turkey, today’s trade figures warrant a cautious optimism about the future of Turkey’s foreign trade imbalances.”
The declining cost of energy imports led the improvement in the foreign trade balance. Imports of mineral fuels, including purchases of crude oil, stood at $2.3 billion last month, down 37 percent from a year earlier, according to preliminary trade data published by ministry of trade and customs earlier this month.
The lira strengthened after the figures were announced, trading 1.1 percent higher at 2.9622 at 11:18 a.m. in Istanbul. After depreciating 20 percent in 2015, the currency has lost another 1.45 percent so far this year, according to data compiled by Bloomberg.