Annual foreign trade deficit reaches USD 114bn


Turkey hasn’t made a good start to the new year in terms of foreign trade.

Exports increased by 10% from USD 17.6bn to USD 19.4bn in January, compared to the same month last year. Imports jumped 21% from USD 27.8bn to USD 33.7bn in the same period. Thus, the foreign trade deficit rose from USD 10.3bn to USD 14.4bn in this period. The hike has approached 40% in the FTD.

The export/import coverage ratio has also hit a historic low… It fell from 63% to 57.4% in the same period.

Let’s look at what the Trade Ministry says for those who use energy imports as an excuse when the hike in imports and the decline in the export/import coverage ratio are mentioned:

“The export/import coverage ratio decreased by 5.6 points to 57.4% in January, compared to the same period last year. Excluding the energy data, the export/import coverage ratio declined by 15.3 points to 73%. Excluding the energy and gold data, the export/import coverage ratio increased by 0.3 points to 91%.”

Turkey ended 2022 at a record high-level foreign trade deficit of USD 109.5bn. USD 4.1bn was added to the annualized deficit in January this year, increasing the figure to USD 113.6bn at the end of January.

The foreign trade deficit stood at USD 53.4bn in January 2022. So, the deficit even didn’t correspond to half of the current figure. The target for this year is USD 80bn for this year. And we’ve already posted a USD 14.4bn deficit in January. So, we should hold the deficit at USD 65.6bn for the remaining 11 months. Will it be achieved? It doesn’t seem so…


The impact of the Central Bank’s decision on January 25 to lift the interest rate ceiling for the FX-protected TRY deposit accounts (KKM), which will be opened with the shift from FX deposit accounts, showed itself. Resident’s FX deposit accounts (DTH) declined by USD 2.1bn in the week ending on January 27, compared to the previous week. USD 1.3bn of the decrease stemmed from legal persons while USD 763m of the decline was caused by real persons.

Although the Central Bank’s decision had a limited impact on KKM, the total amount in KKM increased by TRY 21bn in the same period. It’s unknown how many of the KKM accounts were opened with TRY or the shift from DTH as there is no data on this. Considering the current conditions, opening a KKM account by consenting to a 12% interest rate seems impossible. So, it won’t be wrong to assume that the hike in the total KKM amount stemmed from the shift from DTH.

We’ll see that the total amount will further decline in DTH and increase in KKM with the reflection of the decrease in DTH in the upcoming days with the impact of the Central Bank’s decision on interest rate ceiling.

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