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⚠️ Turkey’s Trade Deficit Jumps, Breaking $90 Billion Threshold

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Core Imports and Gold Purchases Fuel Highest Monthly Deficit Since April

 

ANKARA – Turkey’s foreign trade balance deteriorated at the start of the final quarter, signaling continued pressure on the country’s current account. According to preliminary data released by the Ministry of Trade, the trade deficit in October surged by $1.4 billion year-over-year, reaching $7.4 billion.

This increase pushed the 12-month rolling deficit from $89.3 billion to $90.7 billion. When adjusted for seasonality, the monthly trade deficit hit $9 billion, returning to the high levels last seen in April.

 

📈 Imports Overtake Exports: The Driving Factors

 

The monthly widening of the trade gap was driven primarily by a rebound in imports, which outpaced export growth:

  • Imports: Increased by 6.6% year-over-year to $31.4 billion.

  • Exports: Rose by a more modest 2.2% to $24.0 billion.

The significant rise in imports was influenced by three key elements:

  1. Gold and Energy: Higher gold prices and a demand-driven increase in energy imports (up 8.5% month-over-month after three months of decline) contributed substantially to the deficit.

  2. Core Import Acceleration: Imports excluding gold and energy (core imports) resumed their rapid growth, rising by 4.4% month-over-month. This acceleration confirms that the slowdown observed in August was temporary, tied to transient factors rather than a structural easing of demand.

 

🏭 Investment Goods Lead Import Spree

 

A deeper look into the composition of core imports suggests that the increase is being driven by production and investment activity:

  • Investment Goods: Imports saw the most notable monthly increase, jumping by 11.8%. This indicates Turkish firms are continuing to invest in their production capacity despite economic uncertainty.

  • Intermediate Goods: Imports of raw materials and semi-finished products (excluding gold/energy) rose by 4.6%.

  • Consumption Goods: Imports, excluding jewelry, declined by 1.3% month-over-month, suggesting that the pressure on domestic consumer demand noted in recent confidence surveys is translating into lower final goods imports.

 

Export Trends: EU Provides Relief

 

On the export side, seasonally adjusted figures showed a 1.7% monthly increase following two months of decline, primarily supported by two areas:

  • European Union (EU): Exports to the EU-27 have been rising for the past three months, offering a steady external lifeline.

  • Investment Goods: These exports saw the strongest increase by goods category, rising 10.6% monthly.

Despite these gains, the ratio of core exports to core imports (excluding gold and energy) slightly worsened, slipping from 90.9% to 90.1%, confirming that the surge in raw material and investment imports outpaced export growth.

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