Turkey’s foreign sales powered ahead as exporters achieved their second-best May ever, the nation’s Trade Minister Mehmet Muş announced Wednesday as demand in Europe, the country’s top market, gained pace.
Exports surged 65.5% year-on-year to reach $16.6 billion (TL 142.48 billion) last month, Muş told a news conference in the capital Ankara.
Sales were up from nearly $10 billion a year ago, battered by the fallout from the coronavirus pandemic that had temporarily shut borders.
They increased despite the strictest lockdown yet that covered part of May.
“We achieved the second-highest May figure ever," Muş said.
Imports also jumped 54% on an annual basis to $20.6 billion in the month, the preliminary data by the Turkish Exporters’ Assembly (TIM) showed.
Prior to May, exports had posted all-time monthly highs for five consecutive months and reached as high as $19 billion in March and $18.8 billion in April.
The pace in May widened the foreign trade deficit by 20.74% to $4.15 billion, the data showed.
The exports-to-imports coverage ratio came in at 80% for the month, up by 5.6 percentage points on a yearly basis, Muş said.
Sales were boosted by the recovery in European markets, where almost half of the country’s exports go.
The top market, Germany, received $1.4 billion worth of Turkish goods in May, the data showed, some 52.8% more compared to around $919 million a year ago.
The sales trend to the U.S. also maintained pace as exports surged 30.3% to total $1.15 billion, up from $882.1 million in the same month last year.
Exports to the U.K., with which Turkey signed a post-Brexit free trade agreement in December, saw a 97.4% year-on-year increase last month.
They reached as much as $1.1 billion, compared to $559.6 million a year ago.
Italy and Spain were also among the biggest receivers of Turkish goods in May as exports to European Union members skyrocketed by 109.9% and 170.3% to $834.1 million and $714.7 million, respectively.
The EU accounted for 41.2% of Turkish exports in May as sales were up 71.1% to $6.8 billion, up from $3.97 billion a year ago.
Combined with non-EU countries, the continent accounted for 55.8% of overall Turkish exports.
The 12-month rolling exports reached more than $193.3 billion in May, the highest ever annualized figure, Muş said.
Along with further normalization, Turkey hopes to surpass its export target of $184 billion and reach over $200 billion by the end of the year, Muş stated.
The January-March foreign sales rose 38.3% year-on-year to $85.2 billion, the data showed, also marking the best five-month performance to date.
“Along with May exports, we have achieved the highest ever January-May period,” said TIM Chairperson Ismail Gülle, also addressing the meeting.
“Hopefully, we will reach the annual level of $200 billion.”
The export-to-import coverage ratio was up by 7.8 percentage points to 82.3% from January through May.
The pandemic led to a 6.26% drop in 2020 exports as Turkey closed the year with $169.5 billion in foreign sales, exceeding the target of $165.9 billion in the medium-term program.
Imports were up 4.3% to reach $219.4 billion. The foreign trade gap widened by 69.12% to $49.9 billion.
Some 25 industries managed to increase their sales in May, compared to a year ago, Gülle said.
He said that the steel sector made its highest-ever exports in the month, reaching a total of $1.74 billion. Sales were up 114% compared to a year ago.
The chemicals industry led the way among sectors with $2.13 billion, followed by automotive with $1.88 billion and the steel industry.
Ship and yacht sales in May saw a 134% year-on-year increase to $136 million, Gülle said. The jewelry sector also registered a noteworthy increase as exports surged 113% to $490 million.
Muş said Turkey values becoming a permanent member of the EU, reiterating the government’s determination toward membership.
Both Turkey and the bloc have recently voiced their intent to work together for a more positive agenda. Turkish officials have this year reiterated that the country sees its future in the EU.
The minister also noted the continuous efforts for the update of the customs union agreement with the bloc.
“With the update, which I believe will take bilateral trade to a higher level, both systemic problems will end, and will expand to new areas such as public procurement, e-commerce and agriculture,” Muş noted.
Turkey is the only non-EU country with a customs union agreement with the bloc. The deal was struck in 1995. In its Dec. 21, 2016, assessment, the European Commission proposed revamping the deal.
The current deal only covers a limited range of industrial products and excludes agriculture, public procurement, e-commerce and services.
Officials have earlier said with the inclusion of these sectors, bilateral trade could reach $300 billion, a substantial increase from the current $165 billion.
Muş emphasized that Turkey set a road map for bilateral trade with the bloc, without elaborating.
“I will tighten my contacts even more. We will have an intensive dialogue with the region,” he added.
In addition, the minister said they would also be launching initiatives regarding the monthslong informal blockade by Saudi Arabia.
Exports to the kingdom continued to plunge in May, remaining historically low.
Sales to Saudi Arabia dropped almost 95%% last month to only $7.17 million, according to TIM's data. Sales have dropped from around $139.5 million a year ago.
The May data follows collapses in recent months and reinforced the damage reportedly caused by Saudi Arabia’s unofficial boycott.
Riyadh never publicly acknowledged boycotting goods from Turkey, but last year Saudi business people and retailers endorsed the move amid political tensions between the two regional rivals.
There have been efforts in recent months to repair some diplomatic damage after a decade of tension, especially after the 2018 murder of dissident Saudi journalist Jamal Khashoggi in Saudi Arabia’s Istanbul consulate.
Sales to the kingdom fell to $74.12 million from January through May, the data showed, down 93.6% from over $1.15 billion a year ago.
“We will take steps regarding the discriminatory application related to the export products implemented by Saudi Arabia,” Muş said.
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