Turkiye's trade gap narrows sharply as exports soar, imports fall

Turkiye’s trade deficit experienced a significant reduction in July 2024, as the country saw a substantial rise in exports alongside a marked decrease in imports. According to the latest data from the Turkish Statistical Institute (TurkStat), the trade gap narrowed by 45 per cent year-on-year.

The trade deficit shrank to $4.2 billion in July 2024, down from $7.6 billion in July 2023.

Exports surged by 18 per cent compared to the same period last year, reaching $21 billion. This growth was driven by increased demand in key export markets, particularly in Europe, and was supported by the competitive edge provided by the weaker Turkish lira.

Imports fell by 12 per cent year-on-year, totalling $25.2 billion. The decline in imports was largely due to a reduction in energy imports, which fell by 25 per cent, and a decrease in domestic demand for foreign goods amid ongoing economic challenges.

The automotive sector led the export surge, contributing $3.5 billion, a 20 per cent increase from the previous year.

Agricultural exports rose by 15 per cent, with strong performances in fruits, vegetables and grains.

The reduction in energy imports was a significant factor in the overall decline, driven by lower global oil prices and increased domestic energy production.

The sharp narrowing of the trade deficit is a positive development for Turkiye’s economy, which has been grappling with high inflation and currency depreciation. The boost in exports, coupled with a reduction in imports, particularly in the energy sector, has helped stabilise the country’s external balance and provided some relief to its economy.

This trend, if sustained, could contribute to a more favourable economic outlook for Turkiye, particularly in terms of reducing its reliance on external financing and improving its foreign exchange reserves.

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