Turkish exporters hope to achieve a third consecutive annual record in shipments but are wary of multiple challenges plaguing the global economy, according to the latest industry report.

Outbound shipments are projected to hit as much as $264.7 billion (TL 5.62 trillion) in 2023, the Exports 2023 Report by the Turkish Exporters' Assembly (TIM) showed Monday.

Türkiye made exports worth over $254 billion in 2022, lifting the previous record of nearly $225.4 billion in 2021. The reports came after sales were hit by the coronavirus pandemic and dropped to as low as $169.5 billion in 2020.

Global demand plays a crucial role in Türkiye's exports, said Mustafa Gültepe, the head of TIM. "The current findings show that the loss of momentum in the global income level leads to a slowdown in the growth rate of our exports," Gültepe said.

A global slowdown has affected foreign demand, notably among Türkiye's largest trade partners, spearheaded by Europe.

The TIM report focuses on the potential repercussions of an expected slowdown in global growth on exports, Gültepe noted.

"Because Türkiye's exports are directly related to the growth in global economies. Global demand plays a decisive role in terms of our exports."

According to econometric findings, Gültepe said they expect exports to increase by 4.13% to $264.7 billion this year, marking the 100th anniversary of the establishment of the republic.

His remarks came days after Türkiye's exporters reported their best May sales ever despite a fallout after devastating earthquakes in early February and global challenges.

Outbound shipments jumped 14.4% year-over-year to nearly $21.7 billion. Imports rose 16% to $34.3 billion in May, driving a 19% increase in the foreign trade deficit to nearly $12.7 billion.

The January-May foreign trade gap jumped nearly 30% from a year ago to $56.1 billion as imports increased 8.9% to $158.6 billion, while exports rose just slightly by 0.2% to some $102.5 billion.

Türkiye is trying to emerge from catastrophic twin quakes on Feb. 6 that killed over 50,000 people and flattened hundreds of thousands of buildings, inflicting severe infrastructural damage.

The disaster disrupted production and supply chains across 11 affected provinces.

"We assess that the earthquakes in February caused a loss of $2.6 billion in our exports," said Gültepe.

Türkiye lifted its share in global exports to 1.02% in 2022, according to the TIM report, which also cited a vast potential in services exports that reached a record $90.3 billion last year.

"In global services exports, developing countries, including Türkiye, recovered faster in the post-pandemic period," the report said.

Exporters stressed challenges posed by foreign exchange parity. They had lost about $14 billion overall in 2022 due to the euro/dollar parity.

Although the parity provided a surplus of $327 million, Gültepe on Friday said exports still lost $645 million so far this year.

"It is important to protect the competitiveness of Türkiye's foreign exchange rate," the report said.