Türkiye's foreign trade deficit decreased by almost 43% in August as exports continued to rise amid a slump in imports, official data showed on Friday.

The gap dropped to $4.99 billion, a 42.7% decline from $8.71 billion a year ago, the Turkish Statistical Institute (TurkStat) said.

That marks the lowest trade shortfall on a monthly basis since October 2021.

In August, exports rose 2.3% year-over-year to $22.05 billion, while imports decreased 10.7% to $27.04 billion.

The fall in the trade gap reflects progress in the government's efforts to curb current account deficit, one of the nation's most chronic problems.

Exports are among the priority areas that the government is seeking to rely on as they rebalance the economy's growth composition.

Türkiye managed to achieve the highest August exports ever despite weak external demand, said Trade Minister Ömer Bolat.

The main partner country for exports during August was Germany, followed by the U.K., U.S., Iraq and the United Arab Emirates (UAE).

Excluding energy products and non-monetary gold, the foreign trade shortfall was $302 million, the TurkStat data said.

On a seasonally and calendar-adjusted basis, both exports and imports grew by 1.8% and 2.8% monthly in August.

Energy import bill declined by 0.5% to $5.29 billion and accounted for 19.5% of the overall import figures in August, the data showed.

Crude oil imports saw a 7% decrease to 2.64 million tons, compared to 2.85 million tons in August 2023.

Analyzing the economic sectors contributing to total exports, products from manufacturing industries comprised 94.6%, while agriculture, forestry, and fishing accounted for 3.1%, and mining and quarrying contributed 1.7%.

The share of high-tech products in manufacturing exports was recorded at 3%, a decline of 17.7% year-over-year. In contrast, the share of medium-high-tech products increased by 4.7%, reaching 36.7%.

Between January and August, the foreign trade gap declined by 33.5% from a year ago to $54.94 billion, according to the data.

Exports rose by 2.3% in the first eight months to $170.8 billion, while imports fell by 8.6%, totaling $225.7 billion.

Bolat highlighted that the current account deficit fell to $19.1 billion as of July 2024, marking a $37.9 billion improvement from the $57 billion level seen in May 2023.

As part of its economic program, Türkiye introduced measures to cap strong domestic demand – one of the main reasons for higher imports – and to boost investments and exports to improve the current account balance.

Flipping the chronic current account and trade deficits into surpluses is high on the agenda since the government started reversing years of loose monetary policy after last May's presidential and parliamentary elections.

Bolat emphasized that the rise in exports and the drop in imports have strengthened Türkiye's macroeconomic stability and shifted the country's growth model to one based on net export contribution, supporting efforts to reduce inflation.

Bolat said the export-to-import coverage ratio rose by 10.3 points in August 2024 to 81.5%, and the ratio for the first eight months of the year increased by 9.1 points to 75.7%.

Over the past 12 months, goods exports have risen to a record high of $262 billion. Annualized imports decreased by 8.3% to $340.7 billion.

The trade gap for the last 12 months narrowed 33.6%, amounting to $78.7 billion, said Bolat.