Turkey exports tumble, but government upbeat on economy

Turkey’s exports tumbled in May, reflecting the painful impact of the COVID-19 outbreak on a key driver of economic growth.

Exports slid 41 percent last month to $9.96 billion, according to data published by the Trade Ministry this week. Imports also declined, falling 28 percent to $13.4 billion. The figures meant Turkey’s trade deficit widened almost 80 percent to $3.44 billion.

The slump in exports followed a 41 percent annual decline in April to $8.99 billion. imports fell 25 percent to $13.6 billion.

But the government is remaining upbeat about the prospects for sales of Turkish goods abroad, saying the worst of the slump is over.

Trade Minister Ruhsar Pekcan, speaking shortly before the trade data was published, referred to an 11 percent month-on-month increase in exports as evidence that Turkey’s economy was emerging from a severe downturn caused by the coronavirus. Turkey exports most of its goods to Europe, which is now opening shops as lockdowns ease.

"The worst for exports is behind us,” the minister said, according to the state-run Anadolu news agency. “We are beginning to recover.”

Ratings agency Moody’s said this week that it expected Turkey’s economy to contract by 5 percent this year, mirroring a forecast by the International Monetary Fund. But Treasury and Finance Minister Berat Albayrak said last week that Turkey could end the year with positive economic growth.

Any decline in exports has the potential to worsen Turkey’s current account balance. Deficits require the country to find foreign currency revenue from elsewhere and can impact the value of the lira. The currency has declined 11 percent this year.

Recent surveys show that business and consumer confidence in Turkey is on the mend after sentiment fell to record lows in April.

The lira traded 0.5 percent weaker at 6.74 per dollar on Wednesday, off a record low of 7.269 reached in early May.