Turkey’s total exports, excluding the pandemic period, entered a significant recession for the first time in many years, with the only exception being the defense and aerospace industry.
For the first time in many years, Turkey is facing the prospect of a current account decline in exports. As of the end of October, exports reached USD 210 billion. In the Medium Term Plan (MTP) it is projected that exports would increase by only USD 800 million in 2023 compared to the previous year. As of October, the annualized data shows an increase of 0.7 percent, but it is certain that there will not be a significant increase by the end of the year, and there is still a possibility of a decline in real terms.
All sectors in which Turkey’s exports are traditionally strong have seen serious declines. The only exception is defense and aerospace, which has been growing rapidly in recent years. The sector is preparing to exceed the USD 5 billion level for the first time this year. According to 12-month data, defense and aerospace exports increased by 36.6 percent to USD 5.5 billion. This level means that Turkey is approaching the top 10 defense exporting countries. On the other hand, the outlook is unfavorable in Turkey’s competitive industrial sectors such as textile, ready-to-wear, plastics and automotive.
In 2023, defense and aerospace exports increased by 35.4 percent to USD 4 billion 350 million in the January-October period. As of October, annualized exports reached USD 5 billion 500 million, holding above the USD 5 billion mark. If the sector shows a similar increase in the last two months of the year, Turkey is likely to enter the top 10 in the global league by 2023.
The share of defense and aviation in overall exports is also increasing. The share of defense and aviation exports in total exports rose to 2.1 percent in the January-October period due to the decline in sectors with traditionally high exports in 2023. In annualized data, the share rose above 2 percent to 2.2 percent.
Although there are uncertainties in the figures on international trade due to the nature of the sector, according to the data of Stockholm International Peace Research Institute (SIPRI), which keeps comprehensive data, Turkey is currently ranked 12th with its defense exports in the 2018-2022 period. According to SIPRI data, the share of Turkey in global defense trade is 1.1 percent. The highest share belongs to the USA with 40 percent.