Every month we hear how exports are breaking records and increasing. Turkey does the exports, but imports are someone else’s problem! Therefore, the foreign trade deficit is not our problem, let whoever is running the deficit worry about it! There is almost such an approach.
One can’t help but wonder…
Even if exports really break records, the citizens on the street, including those who vote for the ruling party, don’t give a damn. They are not even aware of this situation, and no one can say that it is a subject they understand very well. And they don’t need to understand it. What does the citizen have to do with total exports…
Citizens normally think, “Well, why should I care? What’s in it for me?” and say, “What’s the result, whether my income has increased or prices have fallen?”
If those who talk about the increase in exports but do not mention imports are not ordinary citizens, but those who deal with the financial sector, the real sector and foreign trade, they already know the real situation.
In this situation, it is difficult to understand what is the logic of organizing ostentatious meetings every month as if they are going to announce some extraordinary data and providing incomplete, let’s not say misleading, information.
I say “incomplete information” because until a few months ago, not mentioning imports could only be considered in this context.
But fortunately, this routine “job” has become a bit easier in the last few months. Exports have been almost flat while imports have decreased, so there is no need to hide the trade deficit; in fact, the trade deficit, which is rarely mentioned, has started to be highlighted as “Look how it is decreasing”.
Annual exports flat line…
The realization of exports or imports in a month does not indicate any trend; there can be large ups and downs due to an unusual item or development. Therefore, it is useful to look at annualized data and follow the trend.
You know how exports are breaking records and climbing up? But the figures do not confirm these claims!
In January this year, annualized exports were USD 255.9 billion. By November, annualized exports were again at USD 255.8 billion.
The annualized amount fell in between and dropped to USD 251.7 billion in June, then increased again and returned to its initial level.
So this is record-breaking exports!
Imports also flat
Exports were almost all in bed in 2023, but is the situation very different for imports, no.
Annual imports, which started the year at USD 369.5 billion, rose to USD 376.4 billion in May and then to USD 365.4 billion in November.
The reason for this recent slowdown in imports is important. The decrease in imports of raw materials and investment goods leads to this result. Whether we should be glad that imports of these items have decreased is, of course, very debatable.
We know that for us, the more raw materials and investment goods we import, the more exports we export. As long as this link, or even dependency, is not reduced, it is not meaningful to be happy about the decrease in imports of raw materials and investment goods.
Trade deficit has not changed much either
The annual trade deficit was USD 113.5 billion in January. Exports remained at the same level and imports declined slightly, bringing the annual deficit down to USD 109.5 billion in November.
After hitting a record high of USD 122.2 billion in May, the annual trade deficit declined in line with the fall in imports, and in a sense fell back to its initial level, or even slightly below it.
However, although this year’s trade deficit has followed a bell curve and is close to January’s level, it is noteworthy that there has been a significant increase since the beginning of last year.
The annualized trade deficit was only USD 53.4 billion in January 2022. By December, the annualized deficit had more than doubled to USD 109.5 billion.
This climb in the deficit was driven by a surge in imports, and it was rising energy prices that pushed imports so high.