UPDATE 2 - Turkey's foreign trade gap narrows 33.2% in April

UPDATES WITH COMMENTS FROM ECONOMIST ENVER ERKAN

By Gokhan Ergocun

ISTANBUL (AA) – Turkey's exports jumped 109.2% on an annual basis to reach $18.78 billion, while imports were up by 61.1% to $21.84 billion, narrowing the trade deficit by 33.2% year-on-year in April.

The foreign trade deficit was $3.05 billion in April, while the figure was $4.58 billion in the same month last year, the country's statistical authority TurkStat said on Friday.

The export-import coverage ratio was 86% in the month, up from 66.2% in the previous year.

“Foreign trade deficit, excluding energy products and non-monetary gold, was $404 million in April 2021,” TurkStat said.

With 94.7%, manufacturing industries products took the lion’s share from overall exports in the month, followed by agriculture-forestry-fishing at 2.7% and mining-quarrying at 2%.

The ratio of high and medium-high technology products in manufacturing industries exports was 38.6% in April, up from 37.6% in the same month last year.

Germany was the main destination for Turkish exports with a total volume of $1.65 billion, while China was the main source of Turkey’s imports with a total of $2.4 billion.

Foreign trade statistics are calculated using two different methods: the special and the general trade systems.

The general trade system is a wider concept, including customs warehouses, all types of free zones, free circulation areas, and premises for inward processing.

According to the special trade system, exports were $17.85 billion, up 111.9% year-on-year in April, while imports increased by 67.7% to some $20.88 billion.

In the first four-month period, Turkey’s exports and imports were up 33.1% and 19.7% to reach $68.74 billion and $82.87 billion, respectively.

The trade gap narrowed 19.7% to $14.12 billion over the same period, while the export-import coverage ratio was 83%, up on a yearly basis from 74.6%.

- Exports to continue to increase

Enver Erkan, chief economist at an Istanbul-based private investment firm Tera Yatirim, recalled that Turkey's foreign trade activities narrowed significantly in April 2020 due to the pandemic's impact on the world economies and supply chains.

Thus, the increase in exports in April 2021 was due to the base effect, Erkan said, adding Turkey’s exports posted a triple-digit increase due to the recovery in foreign economies.

"We expect the positive contribution of the global recovery to foreign demand to support the increase in exports in the upcoming period," he underlined.

He added that the tourism revenues during the summer period can also support the narrowing trend in the current account deficit.

Touching on the import side, he said the increasing import figures stemmed from a base effect and higher goods prices.