Exporters, who closed last year with a limited increase due to the stagnation in major markets, are entering 2024 with cautious optimism. Sector representatives evaluated their expectations for the year to the EKONOMİ newspaper.
Although exports, the driving force of the Turkish economy, did not reach the positive expectations at the beginning of 2023, they closed the year with an increase of 0.6 percent at USD 255.8 billion, meeting the targets set out in the Medium Term Program (MTP).
Turkey’s 2024 MTP target for goods exports is 267 billion dollars and 135 billion dollars for services exports. If this target is achieved, exports of goods and services will grow by 4.5 percent and 30 percent, respectively.
Here is what is expected to happen in the export sector in optimistic, base and pessimistic scenarios…
Pessimistic scenario: USD 255 billion
The responses were also in favor of a better result compared to the MTP. Exporters expect an average decrease of 0.3 percent in a pessimistic scenario in which demand continues to shrink, regional wars are prolonged and new ones are coming, logistics costs increase, and the exchange rate is not at a competitive level. With this decline, exports would be USD 255 billion, in other words, current exports would be preserved.
Base scenario: USD 273.7 billion
Exporters, who think that demand will revive under normal conditions (base scenario) compared to 2023, predicted a 7 percent growth rate, calculating that a revival will begin especially in the post-election period and that both economic and political developments will not be worse in the global environment. With this growth rate, exports would amount to USD 273.7 billion. In other words, exporters think that export revenues will exceed the MTP target in 2024.
Optimistic scenario: USD 290.6 billion
In a very optimistic environment where all conditions are in Turkey’s favor and the recovery in demand is approaching the end of the pandemic, the expected export growth is 13.6 percent on average. If this growth performance is achieved, export revenues would reach 290.6 billion dollars.
Miners are pessimistic
While industrial sectors expect a 1.5 percent decrease in the export forecast for 2024 in a pessimistic scenario, they expect an increase of 5.8 percent under normal conditions and 12.8 percent in an optimistic scenario. Agricultural sectors exports are expected to grow by 4 percent in the pessimistic scenario, 7.5 percent in the baseline scenario and 11.5 percent in the optimistic scenario. In mining, the picture looks pessimistic. The sector expects a decline of 8 percent in exports in a pessimistic scenario and 5.2 percent decline in a baseline scenario. The sector’s optimistic outlook is to reach the previous year’s export figures.
Rustem Cetinkaya, President of the Mineral Exporters’ Association (İMİB), made a statement to EKONOMİ and pointed out that the logistical problems experienced especially in the Red Sea will deeply affect the sector. Noting that countries such as China, India and Vietnam are among the most important export markets, Cetinkaya said, “The container crisis will have negative effects. The containers we normally send to China for USD 300 and to India for USD 400 have risen to USD 1,700. Prices to Saudi Arabia increased as well. The container price to the USA, our second most important market, has doubled. Our cost per ton of the products we loaded went up from USD 12 to USD 60. We cannot reflect these costs in the price. Therefore, our orders will also decrease.”
“We believe we will exceed the MTP targets”
Mustafa Gultepe, President of the Turkish Exporters Assembly (TIM), who gave information to the EKONOMİ for the 2024 targets, said that they targeted USD 267 billion of goods and USD 135 billion of service exports in 2024. Noting that they can easily reach the targets set under normal conditions, Gultepe said, “We frequently come together with all our sectors and evaluate the situation. We have just started the year and we believe that we will reach and exceed our MTP targets. We will look at the situation a little more to determine the bad and optimistic scenarios. Then we will set achievable targets for these scenarios.”
Exporters, who want to focus especially on the world’s most important importing countries, will mainly concentrate on large markets such as the USA, China and India in 2024. Under the organization of the Turkish Exporters Assembly (TIM), five trade delegations to the US, three to China and two to India are planned to be organized.