Despite new economy model Turkey’s foreign trade deficit increases by 2.5 times

According to the foreign trade data announced by the Turkish Statistical Institute (TURKSTAT), the foreign trade deficit of Turkey increased by 147 percent in July compared to the same month last year and went up from $ 4 billion 329 million to $ 10 billion 690 million.

The idea was that inflation would fall with the realization of current account balance in the ‘new economic model’, which has been officially implemented in Turkey since December. In the model, it was argued that the depreciated TL would support exports, and the low interest rate environment would increase employment by moving investments up. But when we look at the July data, it is seen that the foreign trade deficit has substantially gone up and imports have increased much more than exports.

The rate of exports to cover imports also decreased from 79.1 percent in July 2021 to 63.4 percent in July 2022, according to the data.

Foreign Trade deficit increases by 143.7 percent in the six-month period

The foreign trade deficit increased by 143.7 percent in January July period and went from 25 billion 510 million dollars up to 62 billion 177 million dollars. While the ratio of exports to imports was 82.6 percent in January-July 2021, it came down to 69.9 percent in same period 2022

Exports increases by 13.4 percent and imports by 41.4 percent

Exports in July increased by 13.4 percent compared to the same month of the previous year to 18 billion 551 million dollars, imports increased by 41.4 percent to 29 billion 240 million dollars. July January-July exports increased by 19.1 percent compared to the same period of the previous year to 144 billion 331 million dollars, imports increased by 40.7 percent to 206 billion 508 million dollars.