NEWS ECONOMY NEWS        04/05/2020

Turkey’s foreign trade activity falls 34.3% in April 2020 due to coronavirus per preliminary calculations

From the beginning of 2019, the Turkish Trade Ministry has been pushing for the acceptance of the General Trade System (GTS) calculation method of foreign trade as opposed to the Special Trade System (STS) calculation method.

The GTS method, which is more inclusive, has been seen to provide more positive trade figures, and the Trade Ministry clearly wants to take advantage of this change in calculation. The Trade Ministry, in its monthly preliminary reports of trade figures, has shown over the last year both the GTS and STS figures one after the other in the same report. However, in its press announcements and bulletin summaries, the Ministry has prefered to convey the GTS figures only.

 

The Turkish Statistical Institute (TÜİK- TurkStat) continued to provide its monthly detailed data using the STS method over the last year because it needed time to calculate the relative GTS figures going back to and including 2013 for comparative purposes. However, as from January 1st, 2020, having completed its back calculation of GTS figures, it is clear that TurkStat has decided to give precedence to the GTS calculation method of foreign trade over the STS method. TurkStat is continuing to prepare foreign trade figures according to the STS method, but is likely to discontinue presentation of STS data at some time in the future.

 

For these reasons, our website has decided to analyse Turkey’s foreign trade data according to the GTS method as from January 2020, and visitors to our website should be aware that our analyses will be based on different data prior to and subsequent to 2019 yearend. 

 

As a reminder, there are broadly two approaches, closely linked with customs procedures, used for the measurement of international trade in goods. These are the general trade system and the special trade system. The General Trade System (GTS) is the wider concept and under it the statistical territory includes customs warehouses, all types of free zones, free circulation area and premises for inward processing. The Special Trade System (STS), on the other hand, is a narrower concept. Customs warehouses, all types of free zones and premises for inward processing are excluded from the statistical territory by the strict definition of the special trade system; thus only imports and exports of the free circulation area are recorded.

 

According to preliminary figures provided by the Trade Ministry based on the General Trade System (GTS), Turkey’s foreign trade deficit for April 2020 was USD 3,965 million, 45.1% higher than the figure for the same month of the previous year, but 26.5% lower than the USD 5,391 million deficit figure for the previous month of March 2020.

 

Exports were USD 8,993 million in April 2020, 41.4% lower than the figure for the same month of the previous year, and 33% lower than the figure for the previous month of March 2020. Imports were USD 12,957 million in April 2020, 28.3% lower than the figure for the same month of the previous year, and 31.1% lower than the figure for the previous month of March 2020.  Total foreign trade activity fell 34.3% in April 2020 to USD 21,950 million compared with the same month of the previous year. The collapse of export and import figures in April was due to the coronavirus pandemic which forced most countries to introduce strict isolation procedures for their populations. Businesses throughout the world were forced to close down as demand for their goods or services evaporated. 

 

The percentage of imports met by exports was 69.4% in April 2020 compared with 84.9% in the same month of the previous year.

 

With regards the first four months of 2020, Turkey’s foreign trade deficit was USD 16,871 million, 94.6% higher than the figure for the same period of the previous year. Exports were USD 51,742 million, 13.6% lower, and imports were USD 68,613 million, 0.1% higher than the figures for the same period of the previous year.

 

The automotive sector has for the first time this month lost its first place spot in the export table. Due to the coronavirus pandemic, automotive manufacturing plants had mostly been closed in the month of April. Automotive exports in April 2020, most likely largely attained from stocks, were USD 518 million, 5.8% of total exports. Normal monthly automotive exports are over USD 2 billion and around 14-15% of total exports. Automotive exports in the month of April fell to fourth place behind machinery and mechanical equipment (USD 918 million), iron and steel (USD 654 million), and electrical machinery and equipment (USD 531 million).

 

The energy sector lost its first place in the imports table in April 2020. Due to the coronavirus pandemic, production in Turkey’s industry has largely scaled down, roads have been emptied of traffic, and the population has economised on use of home-use electricity and natural gas. The fall in global energy prices as a result of the coronavirus pandemic’s negative impact on world trade has also drastically reduced Turkey’s energy bill. The energy import figure consequently fell to USD 1,055 million in April 2020, second behind machinery and mechanical equipment which recorded to USD 1,545 million. The energy figure was 71.4% lower than the USD 3,692 million figure for the same month of the previous year, and 61.4% lower than the USD 2,736 million figure for the previous month of March. The energy sector’s share of total imports in April 2020 was 8.1% compared with 20.4% in the same month of the previous year and with 14.5% in the previous month of March.

 

The top five countries to which Turkey exported in April 2020 are Germany (USD 862 million), USA (USD 606 million), Iraq (USD 564 million), Italy (USD 400 million), and UK (USD 361 million). The coronavirus pandemic has had a negative effect on exports to a number of countries as travel restrictions and physical contact are restricted or reduced. Countries to which Turkish exports have fallen are as follows : UK – a fall of 57.7% to USD 361 million; Germany – a fall of 35.9% to USD 862 million; France – a fall of 66% to USD 243 million; Spain – a fall of 59% to USD 299 million; Italy – a fall of 51% to USD 400 million: Iraq – a fall of 34.4% to USD 564 million; USA – a fall of 48.5% to USD 606 million; UAE – a fall of48.5% to USD 189 million; Iran – a fall of USD 70% to USD 76 million; and Belgium – a fall of 48.8% to USD 166 million.

 

The top five countries from which Turkey imported in April 2020 are China (USD 1,559 million), Germany (USD 1,267 million), Russia (USD 1,126 million), USA (USD 745 million), and South Korea (USD 588 million).

 

For the year 2019, the trade deficit was USD 29,505 million, a 45.3% decrease on the previous year. Exports in the year 2019 were USD 180,839 million (a 2.1% increase) and imports were USD 210,344 million (a 9% decrease).

 

 



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