ANALYSIS: Turkey’s Trade Deficit Widens Sharply in September as Imports Surge

Weak industrial activity and higher gold imports push trade gap to $6.9 billion

Turkey’s foreign trade deficit widened sharply in September as imports accelerated faster than exports, according to official data released by the Turkish Statistical Institute (TÜİK). The figures highlight mounting external imbalances and potential headwinds for the economy’s disinflation narrative.

Imports rise nearly 9%, exports grow just 3%

Turkey’s exports rose 2.8% year-on-year to $22.6 billion, while imports jumped 8.7% to $29.5 billion. As a result, the monthly trade deficit widened from $4.2 billion to $6.9 billion.

On an annual basis, the country’s 12-month cumulative trade deficit rose from $87.5 billion to $89.2 billion, underscoring continued external pressure despite tighter monetary policy.

Core trade balance also deteriorates

Excluding energy and gold, exports increased 2.1% to $21.3 billion, while imports rose 5.8% to $22.4 billion. The core trade deficit in September thus widened to $1.2 billion, suggesting that underlying trade dynamics remain fragile even when volatile items are stripped out.

Gold imports nearly doubled from $1.1 billion to $2.5 billion in September, pushing the year-to-date gold import total to $15.8 billion. On a 12-month basis, gold imports climbed further from $20.3 billion to $21.7 billion — a sign that demand for the precious metal as a financial hedge remains strong.

Consumption imports up, signaling slower domestic demand

Imports of consumer goods rose modestly from $4.3 billion to $4.6 billion in September, bringing the annual total to $59.3 billion, up slightly from $59 billion in August.

Within subcategories, durable consumer goods imports increased 8% month-on-month to $573 million, while passenger car imports climbed from $1.6 billion to $1.7 billion.

Economists noted that after August’s sharp decline, the limited rebound in consumer imports in September indicates that domestic demand may be losing momentum in the third quarter, consistent with cooling retail indicators.

Outlook:  Turkey’s Domestic Demand Strengthens as Manufacturing Output Remains Weak

Analysts expect smaller current account surplus

Economists project that the current account will show a surplus of around $2.1 billion in September, narrowing from previous months.

The balance-of-payments-defined trade deficit widened from $2.8 billion to $4.4 billion, while the services surplus, mainly driven by tourism, is expected to decline from $9.5 billion to $7.6 billion due to weaker travel revenues.

The report forecasts a 2025 year-end current account deficit of $22 billion, or about 1.5% of GDP, but analysts warn that the risks to this outlook are tilted downward, citing persistent import demand and limited export momentum.

Industrial indicators point to contraction

September’s trade data also signal potential weakness in industrial production, a key driver of Turkey’s economic outlook.

Core intermediate goods imports (excluding energy and gold) rose 13.6% month-on-month and 7.1% year-on-year, reflecting restocking activity. However, the Istanbul Chamber of Industry (ISO) Manufacturing PMI fell from 47.3 to 46.7, marking the lowest level in four months and remaining firmly below the 50-point threshold that separates growth from contraction.

The average PMI dropped from 47.06 in Q2 to 46.63 in Q3, suggesting that seasonally adjusted industrial output likely contracted in September, while calendar-adjusted output probably weakened in annual terms.

For reference, in August, industrial production had risen 0.4% month-on-month and 7.1% year-on-year after seasonal and calendar adjustments.

A warning signal for policymakers

The September figures paint a worrying picture for policymakers. While demand-side cooling remains the official narrative of the Central Bank, rising imports and widening trade deficits suggest that domestic consumption remains stronger than expected and that external imbalances are re-emerging.

With global commodity prices firming and geopolitical risks keeping gold demand elevated, Turkey’s trade outlook could remain challenging through year-end — potentially limiting the scope for further monetary easing.

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