Foreign trade balance posts a deficit of 2.37 billion USD with gold imports in October

According to the October GTS (General Trade System) foreign trade data announced by TURKSTAT in cooperation with the Ministry of Trade; Turkey's exports increased by 5.6% in October 2020 compared to the same period of the previous year to 17.33 billion USD, while imports increased by 8.4% in the same period to 19.70 billion USD.

Thus, the foreign trade deficit increased by 34.4% between October 2019 and October 2020 and reached 2.37 billion USD. The ratio of exports to imports decreased from 90.3% to 88% in the period in question.

 

In October, the country to which we export the most was Germany, followed by England, Iraq and the USA. While exports to 27 countries that make up the European Union increased by 4.1% to 7.23 billion USD, it is seen that the share of the EU in our total exports increased from 42.3% to 41.7%. Our exports to Saudi Arabia decreased by 12.1% due to unofficial calls for boycott. Our exports to this country, to which we exported 2.8 billion USD in the first 10 months of last year, declined to 2.34 billion USD this year. Saudi Arabia had a share of 1.7% in our total exports in the first 10 months of the year. In import items; Germany took the first place in October 2020, followed by China, Russia and the USA. While the share of capital and consumption goods in total imports increased in October, the share of intermediate (raw materials) goods decreased. While the share of high technology products in our total exports was 3.5%, the share of imports of the same group in our total imports was 16.6%.

 

According to STS( Special trading system), Turkey's exports increased by 5.1% in October 2020 compared to the same period of the previous year to 16.44 billion USD, while imports increased by 7.2% in the same period to 18.72 billion USD. The ratio of exports to imports was 87.8% in the said period.

 

Turkey's foreign trade deficit continues to increase on an annual basis. While the foreign trade deficit increased by 34.4% in October compared to the same period of the previous year, the foreign trade deficit increase in the first 10 months of the year was 76.2%. We see that imports of precious metals, including gold, increased by 30.7% to 2.13 billion USD due to consumers' desire to be protected from inflation. In the first 10 months of the year, precious metal imports including gold amounted to 21.72 billion USD in total and increased by 115.9% compared to the previous year. It is observed that the consumer's demand for gold increases during periods of intense fluctuations in the value of TRY and inflation.

 

Since the current trends on the export and import side will likely be reflected in the following months, we expect the increase in the foreign trade deficit to continue and the current account deficit to continue to increase accordingly. Although the restriction in domestic demand has the potential to dampen import growth, we expect the outlook for external demand to be fragile due to the Covid-19 outbreak and weak trends in global trade, which will limit the recovery in exports.

 

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