Jul 20 2018

Turkish exports probably surged 20% in July, assembly says

Turkey’s exports probably climbed more than 20 percent in July compared with the same month of 2017, according to Ismail Gulle, the newly-elected head of the Turkish Exporters’ Assembly (TIM).

July’s performance will be an “important step to achieve the country’s export target of $173 billion for 2018,” Gulle told the state-run Anadolu news agency. TIM had reported a 5 percent increase in annual exports in June,  less than the 12.2 percent growth it reported for the first half.

Gulle, who was elected as TIM’s new chairman on June 30, predicted that exports would beat the government’s goal due to strong performance over the coming months. Turkey needs to increase its exports to neighbouring countries to help further boost sales of goods, he said.

Earlier in July, Gulle praised the introduction of a full presidential system of government under President Recep Tayyip Erdoğan. TIM, which is Turkey's leading exporters' association, has also elected 13 new board members this month.

“Bureaucracy will be reduced and the decision-making mechanisms will act more effectively,” he said, referring to Erdoğan's enhanced presidency, which reduced cabinet posts, took powers from parliament and abolished the prime ministry.

Higher export growth compared with imports may help ease concern that Turkey’s economy is heading for a hard landing after the lira slumped more than 20 percent against the dollar this year. Still, many Turkish exporters rely on imported raw materials and intermediate goods.

Turkish expectations for exports and imports surged for the third quarter of the year, according to a foreign trade index published by the Economy Ministry in early July. The index, based on current and future orders, showed predictions for the path of exports increasing to 118 points, up from 107.3 points in the second quarter. Expectations for imports rose to 113.1 from 101.6.

Turkey’s current account has widened to 6.5 percent of GDP in 2018 as government stimulus boosted demand for imports. The central bank has raised interest rates by 500 basis points this year to help arrest a sell-off in the lira and an inflation rate that has reached 15.4 percent.