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Economy in Brief

Turkey Foreign Trade Volumes Moderate in September, While Sustaining Double-Digit Year/Year Growth
by Carol Stone November 7, 2007

Turkey's economic fortunes currently are tied to their export activities. Through Q2 2007, GDP was up 3.9% from a year ago, while exports of goods and services according to the national accounts definition were up 12.7% in 1987 prices. Exports of goods in the trade accounts remained quite strong in Q3 through August, although they slowed in September. A volume index was up 16.1% in August from the corresponding 2006 value; it trailed off in September to just a 3.5% gain, making Q3 by this measure up 10.4% from Q3 2006. The manufacturing sector remains vigorous for the most part, as a slower September, up 4.1%, followed 15.4% in August, making a Q3 average of 10.9% growth. As we noted here last winter, the automobile industry is a particular highlight; September detail is not yet available, but July and August were up nearly 15% from the year earlier.

Imports too are expanding in Turkey. In Q2, the national accounts measure showed 8.4% growth from a year ago, actually somewhat slower than other recent periods; this coincided with an 8.1% gain in the volume index. But Q3 saw a surge in the latter, by 15.3%. The acceleration is in manufactured goods, up 16.8% in the quarter. Agricultural imports are small, but they have been expanding greatly, and were up almost 45% in the first nine months of this year from the year earlier.

Turkey's overall trade balance has sustained a declining trend, despite the strength in exports, since imports remain noticeably larger. So a much larger percentage increase in exports is needed to produce a big enough dollar amount to overcome a more moderate increase in imports. The numbers that have obtained put the September deficit right at $5.0 billion, down somewhat from July and August's $6.2 and $6.3 billion, respectively, and mildly worse than the $4.5 billion deficit during 2006.

TURKEY, Seas. Adj. Sept 2007 Aug 2007 July 2007 Monthly Averages
2006 2005 2004
Trade Balance, SA, Mil.US$ -$5.0 -$6.3 -$6.2 -$4.5 -$3.6 -$2.9
Exports, SA, Mil.US$ $8.7 $9.6 $8.8 $7.1 $6.1 $5.3
Volume Index* 3.5% 16.1% 12.5% 12.2% 10.4% 13.7%
Imports, SA, Mil.US$ $13.7 $15.0 $14.8 $11.6 $9.7 $8.1
Volume Index* 6.5% 19.4% 20.5% 8.4% 12.2% 20.6%
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