Turkish trade deficit widens at slower pace
Turkey’s trade deficit grew 5.7 percent to $7.8 billion in the month of May from a year earlier, widening at a slower pace as import growth decreased.
Imports rose 5.5 percent to $22.1 billion, outpacing exports, which expanded 5.3 percent to $14.3 billion, the Ankara-based State Statistical Institute said on Friday. Imports had grown 15.6 percent in April and 12.7 percent in March.
The Turkish lira has lost more than 15 percent of its value this year. Those losses are now affecting demand for imports, which have become more expensive in lira terms. The central bank raised interest rates by 300 basis points in May, following that up with a 125 basis-point hike in June to stave off a possible currency crisis.
Seasonally and calendar-adjusted imports contracted by 1.7 percent in May compared with April. Exports rose a monthly 0.3 percent.
Economists say Turkey’s economic growth will now slow from an annual 7.4 percent in the first quarter of the year and the economy could contract in the third quarter.