Turkey's foreign trade deficit narrowed to $5.05 billion, a 25.5 percent year-on-year fall in May from $6.79 billion a year earlier, as exports rose and energy costs fell, according to data released by the Turkish Statistical Institute (TurkStat) yesterday.
In May, exports increased by 9.6 percent to $12.14 billion while imports fell to $17.19 billion, a 3.8 percent decline for the same period.
The export coverage ratio also rose from 62 percent to 70.6 percent in May on a year-on-year basis.
Regarding the fluctuations in exports, while speaking to Anadolu Agency (AA) KapitalFx analyst Enver Erkan said exports were likely to be negatively affected by Britain's decision vote to leave the European Union.
"Britain climbed to first place in Turkey's export destinations in May, which will lead to negative effects on export volume because of Brexit," he said.
In May, Turkey exported $1.3 billion worth of goods and services to Britain, followed in size only by Germany ($1.1 billion) and Iran ($673 million).
It imported $2 billion worth of goods and services from China, its largest importer in terms of amount spent.
Erkan said last week's vote for Britain to leave the EU will cause an economic slowdown in Europe and the U.K., and domestic demand across the EU is likely to decline significantly.
"Turkish exports will be negatively affected," he said. "The declining trade deficit is caused by changes in global prices, especially commodity and energy prices. On the other hand, we will watch the effects of softening relations with Russia and Israel."
This week, ties with Moscow and Tel Aviv improved as Turkey revived links following a six-year hiatus that came after the killing of Turkish activists by Israeli forces. Russia's President Vladimir Putin also eased sanctions imposed following the shooting down of a Russian warplane by Turkish fighter jets last November that had frozen relations between his country and Turkey.
Erkan forecast a $63 billion trade deficit and a $33 billion current account deficit for 2016.In the first five months of the year, exports fell by 4 percent, while imports dropped by 9.5 percent, resulting in a 21 percent fall in the foreign trade gap to $21.3 billion.
Turkey is heavily dependent on energy imports but its energy costs continued to fall amid low oil prices. Energy spending stood at $10.6 billion in the last five months, a drop of $6.4 billion from the same period in 2015.