Trade Minister Mehmet Muş on Monday warned of uncertainties for the period ahead as he said the demand that is expected to deteriorate further in Europe constituted a serious risk for Türkiye’s trade.
"Uncertainties are likely to increase even more in the coming period," Muş said during budget talks at Parliament’s Plan and Budget Commission.
The gloomy outlook was affirmed on Tuesday by data measuring conditions in key export markets, showing demand in Türkiye’s key export markets continued to weaken in October.
Türkiye’s Manufacturing Export Climate Index dropped to 47.9 last month, a survey by the Istanbul Chamber of Industry (ISO) showed, marking a fall for the third consecutive month.
The reading had run above the threshold level of 50 separating growth from contraction for 19 months before slipping to 48.8 in August. It was unchanged in September.
The deterioration in October was the highest since June 2020 when Türkiye was plagued by the first wave of the coronavirus pandemic, ISO said.
Muş cited the growing risk stemming from weakening demand in the European Union, Türkiye’s biggest export market.
"This is why we are carrying out the necessary studies to strengthen our market diversification by directing our exporters to alternative markets," said the minister.
"Uncertainties are likely to increase even more in the coming period. A difficult period is ahead facing all countries on a global level."
The survey by ISO said output in Germany, the largest export market for Turkish manufacturers in Europe, declined for the fourth month in a row, with the fall accelerating compared to September.
The United Arab Emirates (UAE) was the only country of Türkiye's top 18 export markets that registered an increase in economic activity in October, the survey said.
"The fact that only the UAE remains in the growth zone among the main export markets ... clearly shows that the slowdown in the global economy is widespread," said Andrew Harker, economics director at S&P Global Market Intelligence.
"Current trends suggest that manufacturers will continue to have difficulty obtaining new orders from export markets at least for the rest of 2022," Harker noted.
Türkiye’s exports remained buoyant and rose 15.4% from January through October this year to $209.5 billion, according to official data, marking an all-time 10-month high.
Türkiye has set a $250 billion export target for this year, after reaching a record $225 billion in 2021.
Shipments to the EU jumped 13.5% in the said period, Muş said, stressing Türkiye enjoyed a $9.7 billion surplus in trade with the bloc.
"This successful performance was achieved despite the negative factors on a global scale, as well as the serious negative effects of the decline in (foreign exchange) parity on our foreign trade," he added.
Muş said exports would have been $12 billion higher and the trade deficit some $2.8 lower in the first 10 months had the euro not declined against the dollar.
Imports, on the other hand, surged 39.5% from January through October to $300.55 billion, the data showed, driven by rocketing energy costs and a jump in gold purchases.
Energy imports leaped 118.4% year-over-year to $43.7 billion, while gold purchases soared 198.4% to $10.1 billion.
Approximately 63% of the increase in imports stemmed from energy and gold, Muş said.
Muş also said the volume of e-commerce that gained major pace with the pandemic more than doubled in the first half of this year.
"The e-commerce volume that stood at TL 161 billion in the first six months of 2021 increased to TL 348 billion in the same period of 2022," the minister said.
Muş informed that TL 13.3 billion out of the TL 17.12 billion budget estimated for the ministry in 2023 would be used for rearrangement and development of trade.