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Turkey’s exports started the new year with the highest monthly figure in history, as sales surpassed $ 15 billion (TL 107 billion) in January, the country’s trade minister announced on Tuesday.
Sales rose 2.5% year-on-year in the first month of 2021, Ruhsar Pekcan said at a meeting in the capital Ankara, revealing preliminary data from the Commerce Ministry.
“This figure shows that the growth process seen in the last quarter of last year continues in our exports,” said Pekcan.
Imports were down 5.6% to reach $ 18.1 billion, the data showed.
With a fall in imports and an increase in exports, the foreign trade deficit ended up shrinking 32% annually to more than $ 3 billion.
Pekcan said it is a “development that supports the macroeconomic stability of our country.”
The export and import coverage ratio increased 6.5 percentage points to 83% last month. Excluding gold, this figure stood at 87%, Pekcan said.
“Figures for January indicate a significant and successful performance amid the current uncertainty in the global economy, restrictions imposed by our trading partners due to the second wave of the coronavirus, and supply constraints such as delayed delivery times and increases in logistics costs, “said the minister noted.
Exporters have left behind a year overshadowed by the coronavirus pandemic that ended up bringing a sharp contraction in foreign demand in the country’s main export markets, especially the European Union.
Measures to curb COVID-19 have affected the country’s key tourism revenues, which are dependent on imports, ultimately leading to an increase in the trade deficit.
Sales recovered in the second half of the year before many countries re-imposed lockdown measures to limit the spread of the pandemic.
The month of January followed the highest December exports in history, as sales increased 16% to $ 17.84 billion.
The outbreak caused a 6.26% drop in exports, but did not prevent Turkey from closing 2020 with $ 169.5 billion in foreign sales, surpassing the $ 165.9 billion target in the medium-term program.
Imports increased 4.3% to $ 219.4 billion. The trade deficit widened by 69.12% to $ 49.9 billion last year.
Turkish exports in 2019 were around $ 180.8 billion, while imports totaled $ 210.3 billion.
Depending on the pandemic, Pekcan said Turkey is optimistic about achieving the export target of $ 184 billion this year.
Additional supports to expand
The minister especially emphasized that support for digital marketing activities will be further enhanced in the next period, as well as efforts to boost electronic exports, focusing on target countries and favorable export incentives this year.
Pekcan emphasized that they would maintain the focus on the 17 target countries and the five target sectors that were named in the Export Master Plan, announced in 2019.
These countries include the United States, Brazil, China, Ethiopia, Morocco, South Africa, South Korea, India, Iraq, the United Kingdom, Japan, Kenya, Malaysia, Mexico, Uzbekistan, Russia, and Chile. More than 25% of Turkish exports have been directed to these markets.
The five target sectors included machinery, automotive, electrical-electronic, chemical, and the food industry.
Pekcan said exporters would receive additional support related to these markets.
He also claimed that the Türk Eximbank provided financing, both loans and insurance, worth $ 45.6 billion in 2020, 3.6% more than the previous year.
Automotive Champion Again
Also at the meeting, Ismail Gulle, head of Turkey’s Assembly of Exporters (TIM), said the jewelry, air conditioning and fresh fruits and vegetables sectors posted the strongest performance last month.
The automotive industry was once again the export champion among sectors with sales worth $ 2.3 billion in the month, followed by chemicals with $ 1.7 billion and ready-made apparel and apparel worth $ 1.5 billion, added.
Gülle said that exports of what he said were COVID-19 products increased 22% to $ 34.8 million.
Germany top market
Germany, the EU’s largest economy, was the country that received the most Turkish goods last month at $ 1.5 billion. It was followed by the United States with $ 933 million, Italy with $ 864 million, the United Kingdom with $ 814 million and France with $ 737 million.
Exports to the EU, the country’s largest market, reached 6.5 billion dollars, which corresponds to 42.9% of total sales for the month.
The Near East and Middle East countries received nearly $ 2.8 billion in Turkish goods, while sales to the African continent and the Far East countries amounted to $ 1.3 billion and $ 1.1 billion, respectively. Exports to North American countries amounted to just over $ 1 billion.
Some 1,457 startups joined the country’s family of exporters when they made their first sales, worth nearly $ 75.45 million, in January.
Increased use of the Turkish lira
Gülle said that the recent increase in the euro / US dollar exchange rate benefited exports.
“In January, the positive effect of the increase in parity was $ 586 million. We anticipate that the positive outlook for the euro / dollar parity will continue in the coming months, ”he said.
Exporters used Turkish lira in exports to 169 countries worth TL 5.2 billion (US $ 699 million), said the TIM director. Gülle highlighted that 6,235 companies used the lira in their export transactions, highlighting that the upward trend continued in recent months.
TIM’s president said that the world has started talking about economic recovery in 2021, recalling the recent upward revision in the International Monetary Fund (IMF) forecast for the Turkish economy.
The 190-country lending organization said last month that it expects the economy to grow around 6% this year before settling back to a growth rate of around 3.5% per year from 2022, but urged Ankara to implement an additional specific stimulus to address COVID. 19 pandemic needs.
The 6% gross domestic product (GDP) growth projection in the preliminary findings of the IMF’s annual review of Turkey’s economy compared to a previous growth projection of 5% for the country in 2021 issued in October as part from the latest IMF World Economic Outlook.
After sinking 3.5% in 2020, the worst year since World War II, the world economy is likely to grow 5.5% this year, according to IMF projections. The new figure for 2021 is an improvement over the 5.2% expansion forecast by the IMF in October and would mark the fastest year of global growth since the 2010 reversal of the financial crisis.
“We are proud that our country, which is expected to become one of the few countries that closed 2020 with growth, stands out among developing countries with a significant growth rate in 2021,” said Gülle.
