ANALYSIS: Turkey’s Trade Balance Shows Improvement in Q3 Despite September Setback

Summary:

Turkey’s foreign trade deficit widened in September due to weaker exports and stronger imports. However, on a quarterly basis, the third quarter displayed a clear improvement in the trade balance, driven mainly by slowing imports. This trend could signal a broader deceleration in economic activity.

September Deficit Widens

According to provisional data from the Ministry of Trade, Turkey’s foreign trade deficit rose by USD 1.7 billion year-on-year to USD 6.9 billion in September.

Exports increased by 3% annually to USD 22.6 billion, while imports climbed by 8.8% to USD 29.5 billion. As a result, the cumulative deficit for the first nine months of the year reached USD 67 billion, while the 12-month rolling deficit rose from USD 87.6 billion to USD 89.3 billion.

Seasonally and calendar-adjusted data showed that the sharp improvement in July and August was reversed in September, with the balance returning to June levels.

Exports Lose Momentum

Seasonally adjusted exports declined 2.8% month-on-month in September.

• Gold exports remained weak at USD 172 million, far below the January–July average of USD 317 million.

• Energy exports slipped 2.5%.

• Excluding gold and energy, exports fell 2.9%, in line with headline data.

By region, exports to the EU-27 picked up after three months of decline, while the sharpest drop was recorded in the Middle East.

By product group, the contraction was broad-based: investment goods fell 8.7%, consumer goods 2.7%, while intermediate goods posted only a limited decline.

Imports Rebound Sharply

After contracting a cumulative 11.4% in July and August, imports rose strongly by 8.8% in September.

• Gold imports surged to USD 2.5 billion, the highest since September 2023.

• Energy imports fell 8.5% month-on-month, extending the downtrend seen since early 2025. Lower demand, rather than price effects, drove the decline, consistent with weak manufacturing and PMI data.

• Core imports (excluding gold and energy) rose sharply by 6.8%.

Intermediate goods imports jumped 10.3%, investment goods imports rose 5.2%, and consumer goods imports climbed 4%. Jewelry imports increased modestly by 5.1% to USD 326 million but remained well below the 2024 average of USD 595 million.

As a result, the export-to-import coverage ratio excluding gold and energy fell from 102% in August to 95% in September.

Broader Picture: Q3 Improvement

Despite September’s setback, the third quarter as a whole showed marked improvement in Turkey’s trade balance, spread across gold, energy, and core segments.

This was largely driven by slower imports — a development that may also signal a cooling in domestic economic activity during the quarter.

Outlook

Turkey’s trade performance in Q3 suggests an improved external balance, which may provide some relief for policymakers. However, the September figures highlight risks ahead, particularly if exports continue to weaken while core imports remain strong.