(Bloomberg) -- Turkey posted a trade deficit of $5.75 billion in October, a further narrowing that suggests the economy’s rebalancing remains on track. The decline in imports was the slowest over the past six months, reflecting the relative strength of the Turkish lira.
Exports last month rose 3.6% from a year earlier to $23.6 billion while imports dropped 0.2% to $29.4 billion, data published Saturday by the Trade Ministry showed. The figures took the 10-month trade shortfall to $65.6 billion, down more than 30% from the same period a year earlier. Ten-month exports were $216.4 billion, compared with the government’s full-year estimate of $264 billion.
“Strong steps we have taken to boost exports and decrease imports continue to bear fruit,” Trade Minister Omer Bolat said in a post on X. He noted that the current account deficit in the first eight months of the year was less than $10 billion, down from almost $39 billion in the same period of 2023.
Turkey’s top export destination was Germany in October, at $1.81 billion. China was the top exporter to Turkey, at $4.24 billion, followed by Russia with $3.06 billion.
“Turkey is set to report a current account surplus in September and that may continue in October, too,” said Hande Sekerci, an economist at Is Asset Management in Istanbul. “The export outlook and confidence indexes indicate there won’t be a marked slowdown in the final quarter.” Sekerci expects a current account deficit of $13 billion this year, down from $40.5 billion in 2023.
President Recep Tayyip Erdogan carried out a sharp pivot from his previous policy of low interest rates at all costs after he was reelected last year. Led by Treasury and Finance Minister Mehmet Simsek, a former Merrill Lynch bond strategist, the authorities tightened monetary conditions significantly while pledging that the lira will appreciate in real terms to tame inflation, a policy that has attracted capital flows.
The lira has weakened 14% against the dollar this year, the fourth worst-performing emerging markets currency, according to data compiled by Bloomberg. Still, the move is not as drastic as annual domestic inflation, which was 49.4% as of September. Inflation data for October will be published on Monday.
(Updates with comment in fifth paragraph.)
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