Turkish monthly exports maintained an upward trajectory in March, Trade Ministry data showed on Thursday, which, coupled with the decline in imports on an annual basis, has contributed to narrowing the trade gap, signaling a continuation of the positive momentum observed in previous months.
"In March 2024, exports amounted to $22.58 billion. The March figure exceeds $20 billion in January and $21.1 billion in February, showing that the monthly increase in exports continues in March," the ministry said in a statement.
The ministry also said that the positive trend in exports has continued since the second half of 2023 and that in the first quarter of this year, exports surged by 3.6% compared to the same period last year, reaching $63.7 billion.
Although an annual drop of 4.1% was observed in March exports, the figure still marked the third-highest March value in history, it added, citing the calendar effect as the rationale behind the fall.
Imports, on the other hand, dropped by 5.7% to $30.09 billion year-over-year in the month, the data showed, and the foreign trade deficit thus narrowed by 10.3% on an annual basis.
The export-import coverage ratio was 75%, improving by 1.3% over the same period.
Trade gap continues to decrease
While exports in the first three months of the year have risen 3.6%, compared to the January-March period of 2023, imports have plunged by 12.6% year-over-year to $84.1 billion, the data showed, bringing the trade shortfall to $20.5 billion.
The foreign trade gap fell by 41.2% in the first quarter of the year versus last year's first three months, the ministry said, pointing to a narrowing trend observed since last May.
"In the first quarter of 2024, the foreign trade deficit decreased by 41.2% to $20.5 billion compared to the same period last year. Thus, the 12-month annualized foreign trade deficit, which increased to $122.2 billion in May 2023, after 10 months, decreased to $92 billion in March 2024," it stated.
At the same time, the export-import coverage ratio increased by 11.8 percentage points to 75.7% compared to the same period a year earlier.
The ministry at the same time highlighted the drop in the current account deficit registered in recent months, hoping for a downward trend to reflect on the data for February.
"The annualized current account deficit, which stood at $60.1 billion in May 2023, decreased by $22.6 billion in the following months, reaching $37.5 billion annually in January 2024," it said, adding that the annualized figure is expected to fall further to around $32 billion once the February data is announced.
The current account is the most complete measure of trade because it includes investment flows and trade in merchandise and services. A deficit means Türkiye is consuming more from overseas than it is selling abroad.
As a result of these developments in foreign trade for the first quarter of 2024, net exports are expected to contribute positively to economic growth, the ministry said.
It also noted that it is expected that the trend of rise in exports and fall in import volume would continue and thus the decreasing foreign trade deficit would make a positive contribution to the decline in the current account deficit.
Narrowing the current account gap and reaching a surplus were among the main goals of President Recep Tayyip Erdoğan's economic plan in recent years. However, sharply rising oil, gas and grain prices after Russia's invasion of Ukraine caused it to widen until mid-2023.
The deficit in 2023 as a whole came in at $45.2 billion, according to the data by the Central Bank of the Republic of Türkiye (CBRT).
The data showed Germany remained Türkiye's biggest export market, having received $1.8 billion worth of Turkish goods in March.
It was followed by Italy and the United States, each receiving $1.3 billion worth of goods from Türkiye.
Evaluating the data, the head of the Turkish Exporters Assembly (TIM) Mustafa Gültepe noted that eight sectors increased their exports in March, highlighting what he said was a record in first quarter exports.
"The automotive industry once again maintained the first spot with $3.2 billion in exports. Our other sectors in the top five are chemicals, with $3 billion, ready-to-wear clothing with $1.6 billion, steel with $1.5 billion and electrical-electronics with exports worth $1.47 billion," he informed.