Posted by meb at November 3rd, 2011
Turkeyâ€™s trade deficit widened to a record level in September compared with last year, official figures published yesterday show.
Skyrocketing current trade deficit and a low domestic savings ratio in the growing economy raise concerns about the countryâ€™s dependency on import products and booming demand, according to professionals.
The trade deficit was $10.4 billion in September, the biggest gap recorded, compared with $6.7 billion on September last year and $8.2 billion the previous month, according to figures published by Turkeyâ€™s Statistical Institute (TÃœÄ°K). Measures taken by Turkeyâ€™s Central Bank have thus failed to reduce the trade gap in September, an economist told the HÃ¼rriyet Daily News.
Turkey might have already experienced the â€œpeakâ€ in its trade deficit by last month, and it might take a few months for the Central Bankâ€™s steps to show their effect on the economy, Erol KatÄ±cÄ±oÄŸlu, a professor at Istanbul Bilgi University, told the Daily News yesterday.
â€œStill, the Bank might be pushing the envelope regarding its moves between restrictive and expansionary monetary policies, he added.
More expensive imports
The Turkish Liraâ€™s recent depreciation â€œmight be seen as [a chance] to put the brake on booming consumption and imports in Turkey,â€ said KatÄ±rcÄ±oÄŸlu, adding that imports had not slowed down, although they have become more expensive, with the liraâ€™s depreciation.
The trade gap grew faster than expected by markets, which estimated the deficit to be around $8.5 billion in September, mainly due to a considerable rise in imports, whichtotaled $21 billion in September â€“ $2 billion higher than the marketsâ€™ expectation â€“ thus marking an increase of 35 percent compared to the same month last year. Meanwhile, exports accrued in line with expectations at $10.8 billion. The gap for the first nine months of 2011 was $82 billion.
â€œIt is obvious that the annual trade deficit will be way beyond expectations,â€ said Erdal SaÄŸlam, an Istanbul-based economist.
Demand has not been reduced yet in line with expectations from the economy administration, he said, adding that low saving ratios in a country with strong demand could trigger further problems down the line.
â€œWe expect to see an economic slowdown starting from November thanks to the Central Bankâ€™s new policy that employs the interest rate corridor to increase overall interest rates in the economy,â€ he said in a statement emailed yesterday.
Structural problems are still preventing Turkey from forging a sustainable economy, said ErdoÄŸan Alkin, a Daily News columnist. The savings ratio problem still remains a key issue ahead of the country, mainly stemming from income injustice and a failing tax policy, he said. The ratio of domestic saving to gross domestic product in Turkey is currently at record-low levels and is expected to go down to 12 percent by yearend, compared to 12.6 pct it was in 2010.
source: hurriyet daily news