Depreciation of Turkish Lira Helps Exporters
Turkish companies exported $11.5 billion worth of goods in June, despite the eurozone crisis and the turmoil in the Middle East. The 12-month rolling figure has touched $125 billion. The depreciation of the Turkish currency is helping exporters
Exports in June totaled $11.5 billion, rising 25.2 percent compared to June 2010.Turkey’s export performance in June was much better compared to last year, but as the surge in imports is much faster, the figures do not represent much hope for a dangerously high foreign trade deficit.
According to preliminary figures released by the Turkish Exporters’ Assembly, or TİM, on Friday, exports in June totaled $11.5 billion, rising 25.2 percent compared to June 2010. The 12-month rolling exports have surpassed $124.9 billion, posting an annual increase of 14.4 percent.
The export champion sector was once again automotive, with $1.8 billion in monthly foreign sales. Textiles, with $1.48 billion in exports, and chemicals, with $1.46 billion of exports, followed.
According to data released Thursday, Turkey’s trade deficit in May surged to $10.1 billion, exceeding all estimates. As of April, the annual current account deficit stands at $63.4 billion.
TİM chief Mehmet Büyükekşi revealed the figures at a press conference held in the Inner Aegean city of Isparta.
The increase in June means that exports have been rising at a pace of over 20 percent for the past seven months. The annual increase in agricultural goods exports was 28.4 percent, reaching a volume of $1.37 billion. The share of agriculture in overall exports stood at 11.9 percent. Meanwhile, overall exports of the industrial sector surged by 25.6 percent to $9.77 billion.
In June, foreign sales of the mining sector totaled $370.7 million, rising by 7.8 percent compared to last year, according to TİM data.
Fall in the lira
A depreciating currency has been supportive of exports in the first half of the year, according to Özgür Altuğ, chief economist at BGC Partners. “Turkish exports became more competitive thanks to the lira depreciation, but the unrest in the [Middle East and North Africa] region and EU’s debt crisis could affect Turkey’s export performance negatively in the coming period,” Altuğ said in a note to investors.
Recalling a TİM survey conducted at the end of the first quarter, Büyükekşi said exporters wanted to see the U.S. dollar at 1.63 lira and the euro at 2.22 liras on average. “The current level is ideal for exporters,” he said. “And we have begun to see the results.”
Since the start of April, the U.S. dollar advanced 6.7 percent against the Turkish currency. In the same period, the euro’s rise has been over 7 percent.
Turkey’s top export destination in June was Germany, followed by Italy and the UK. However, the monthly rise in exports was the most impressive for Greece, which hiked Turkish imports by 58.6 percent to $187.3 million in the month. The Greek surge was followed by Saudi Arabia, which increased Turkish imports by 47.7 percent to $354.4 million.
Exports to four countries declined in June, compared to May: Egypt, the United States, France and Romania. Foreign sales to Egypt declined by 17.3 percent, displaying how the political turmoil in North Africa has affected the economy.
Commenting on the data, State Minister Zafer Çağlayan said the country has exported $65.8 billion worth of goods in the first six months of the year. Recalling that the government’s medium-term program sets an annual goal of $127 billion, Çağlayan said Turkey would break a new record this year. The previous record was set in 2008, when exports totaled $127.5 billion.
“Economic growth figures for the first quarter, coupled with export data, show that the Turkish economy is gearing up,” Çağlayan said. “With a sustainable export rise, I believe our economic growth this year will average 7 percent.”
03 July 2011
SOURCE: TURKISH DAILY NEWS
