Exports down 14.4 pct in January, prior to the Iranian effect
by Daily Sabah
ISTANBULFeb 01, 2016 - 12:00 am GMT+3
by Daily Sabah
Feb 01, 2016 12:00 am
Turkey's exports shrank 14.4 percent in January to $9.2 billion, compared to the same month of last year. Furthermore, annual exports hit $140.6 billion, reflecting a 9.8 percent decrease compared to the previous period, according to data released by the Turkish Exporters' Assembly (TIM) on Monday. However, the head of TIM expects exports to gain speed due to the recent lifting of sanctions on Iran and reforms slated for completion by the government in the next three months.
According to a written statement by TIM, the largest buyers of Turkish goods in January were Germany, the United Kingdom, Italy, the United States and Iraq, respectively. Exports to Germany reached $1 billion in January, reflecting a slight decrease of 1.5 percent compared to the same month in 2015. Turkish exports reached $631 million in the U.K., $558 million in Italy, $449 million in the U.S. and $441 million in Iraq, indicating a decline in exports to these respective countries by 15.9 percent, 2 percent, 6.6 percent and 47.9 percent.
In the first month of 2016, the automotive sector realized an export volume worth $1.3 billion, becoming the biggest exporting sector in January. The automotive sector is followed by ready-made clothing exports, worth $1.3 billion, and chemicals, worth $1 billion.
The highest increase in the volume of exports was achieved by the defense and aviation industry, which saw an increase of 19.4 percent in January compared to the same month in 2015. In the first month of this year, ornamental plant exports also grew 0.9 percent, with tobacco exports also increasing to 0.7 percent. Jewelry as well as olives and olive oil, however, resulted in the highest decreases, with these sectors shrinking by 40.5 percent and 39.2 percent, respectively.
TIM President Mehmet Büyükekşi said with the recent sanctions on Iran that were lifted this past month, Turkey's exports to Iran will remarkably increase. Stressing that "Iran will be a stable market, with its population of 82 million and a gross domestic product [GDP] of $417 billion," Büyükekşi said Turkey will be one of the counties that can potentially benefit the most from the Iranian entry into world trade.
Büyükekşi also addressed the preferential trade agreement (PTA) put into effect on Jan. 1 2015, noting that this agreement will allow exports to gain momentum. "The most critical point here is that by lifting sanctions and following the PTA, foreign firms will open up to trade with Central Asia, which goes hand-in-hand with trade in Turkey," Büyükekşi said. "We foresee that all these developments will contribute to the growth of exports by 8 percent to 10 percent. As a country, we are aware of the fact that we need to take steps in a precisely planned way … we will conduct the necessary work to present a mapped-out plan to our exporters. We will continue to support our exporters in order for them to be more effective in these markets."
Moreover, while expressing Turkey's efforts to take giant steps as part of the Medium-Term Economic Plan with an export-oriented growth strategy, Büyükekşi referred to 2016 as the year of change, avidity and opportunity, pointing to the research and development (R&D) package recently launched by the government. "[In terms of utilizing the opportunities in 2016], we think that the structural reforms to be conducting – regarding taxes, the labor force, the energy sector and capital as well as the banking and public sectors – are crucial for our country," he said. Büyükekşi added: "Furthermore, the R&D reform package aims to coordinate efforts among the major economic forces. Undoubtedly, these reforms will not only contribute to the overall economy but also to our exports in 2016."
Turkish Trade Center to be established in Tehran
Büyükekşi also expressed in the statement that following the lifting of sanctions previously imposed on Iran, with a view to capture a strong position in the Iran market, a Turkish Trade Center will be founded in Tehran, Iran. Regarding the issue, Büyükekşi said "the Preferential Trade Agreement (PTA), which was put into effect on Jan. 1, 2015 and requires 125 Customs tariffs to be nullified each year, will give further momentum to exports...[after the termination of sanctions and PTA] we anticipate between 8 and 10 percent additional contribution to exports." Büyükekşi further announced that in March, they will share the results of the collaborative work called, " the Analysis of the Effects of Iranian Economy in the Post-embargo Period" they have been carrying out, along with the economy ministry and Foreign Economic Relations Board of Turkey (DEİK).