According to the official data, in May 2020 Turkey’s exports were 9 billion 967 million dollars with a 40.9% decrease and imports were 13 billion 387 million dollars with a 27.8% decrease compared with May 2019. In May 2020 foreign trade deficit was 3 billion 420 million dollars with a 102.7% increase compared with May 2019; as the exports/imports coverage dropped to 74.5% from 90.9% in May 2019.
Hence, in January-May 2020 Turkey’s exports declined by 19.7% while the contraction in imports was more limited with 5.2%.
The pandemic that had not affected Turkey’s domestic consumption based growth in 1Q20 had kept the import growth elevated. In contrast, as the exports market were weighed down by COVID-19, Turkey’s exports began stalling. While the exports markets remain harmed due to pandemic related disturbances and the Turkish government is trying to stimulate domestic demand heavily, the widening in the trade balance has been catching negative attention.
The rapid widening in Turkey’s trade deficit along with an estimated USD 20 billion loss of tourism income in 2020, Turkey’s current account deficit problem has been resurfacing again following a mere surplus recorded last year. The financing problems of course will soon put pressure on the Turkish lira once the summer months phase out.