Alarming fall in Turkey’s exports
Güncelleme Tarihi:
Hürriyet Daily News
Oluşturulma Tarihi: Aralık 02, 2008 00:00
ISTANBUL - While Turkey’s November exports plummet 22.3 percent compared to same period last year, Deputy Prime Minister Nazım Ekren continues to reiterate that the global crisis will not have a major effect on Turkey. The crisis has peaked and now begins to descend, says prime minister
In the latest indication that Turkey is feeling the pinch of the global financial crisis, exports tumbled in November to $8.66 billion, representing a 22.3 percent decline compared to last November. Meanwhile, Deputy Prime Minister Nazım Ekren reiterated the government’s position that Turkey will not be affected by the global economic crisis as much as other developing countries.
According to figures from the Under-secretariat for Foreign Trade, exports in the first 10 months of the year increased 24.85 percent compared to the corresponding period last year, totaling more than $120 billion. Annual exports, meanwhile, increased 23.49 percent to nearly $130 billion.
Industrial exports, which make up more than 80 percent of sales abroad, declined 25 percent in November, from last year. The contraction in Western Europe’s automotive markets hit Turkey hard, as exports of vehicles and automotive equipment dropped 38 percent from November 2007.
Mehmet Büyükekşi, president of the Turkish Exporters’ Assembly, or TİM, announced November export figures yesterday in Gebze. "Automotive is our largest exporting industry. We have to support the industry," Anatolia News Agency quoted Büyükekşi as saying. Automobile makers in Turkey, including the local unit of Ford Motor, suspended production in October and November, citing falling demand from Europe.
"Due to the [euro/dollar] parity movement and a slowdown with our main trading partner, the European Union, this was in line with our expectations," Oyak Securities economist Elif Gülay Girgin told Reuters.
In other developments, consumer confidence dropped to its lowest since at least 2002 in November as the global credit crisis hit the Turkish lira and threatened job losses, according to CNBC-e television channel.
The confidence index fell 1.5 points to 53.6, the lowest level since the measure was launched in 2002, the channel said in an e-mailed statement yesterday. The official statistics agency will announce its measure of November confidence Dec. 19. The YTL has lost about 19 percent of its value against the dollar since October.
Convincing argument?
As Turkish exports feel the crunch, government officials continued to stick to the line that the crisis will not affect Turkey as much as elsewhere. Based on external financing and foreign demand parameters, it can "easily be told" that the global crisis will have less of an impact on Turkey compared to other developing countries, said Deputy Prime Minister Nazım Ekren yesterday.
"Turkish foreign trade’s share in the global trade volume is 1 percent. A similar situation is also valid in capital movements," said Ekren, during a breakfast meeting with the members of the Economy Reporters Association, or EMD, in Ankara. Although Turkey’s integration into global markets is advancing, its share in the global system is still too little, said Ekren. "In short, Turkey is going through an integration process. Therefore, not all capital or trade movements will affect the country."
Two issues
However, Turkey will have to face two issues head on, external financing and foreign demand, he said. Looking into external financing, one needs to focus on direct investments, portfolio investments the country traditionally lures and the terms of loan maturity, Ekren said. When it comes to foreign demand, export data should be focused upon, he added. It certainly is important to obtain external funding, however, in this period it is even more important to utilize equity, Ekren said.
"Another reason that allows us to easily say Turkey will not be affected by the crisis as much as other developing countries is the country’s banking industry does not have a major share in its economy," Ekren said.
"A reason that allows us to easily say Turkey will not be affected by the crisis as much as other developing countries is that the banking industry does not have a major share in the economy," Ekren said. "Another reason is reciprocal investments among developed countries. There are serious financial investments in Australia, Spain, Sweden, Hungary and Iceland. Such investments do not exist here and therefore, Turkey does not have an emerging market risk," he said.
The Central Bank resumed the foreign exchange depot market and acts as the financial intermediary and regulator, Ekren said. If a new law is drafted on the return of loans acquired from abroad, then this can be added to foreign exchange liquidity generated by foreign funding. Also, more sources should be provided to Türk Eximbank, acting as the government’s major export incentive instrument, he said.
According to figures from the Under-secretariat for Foreign Trade, exports in the first 10 months of the year increased 24.85 percent compared to the corresponding period last year, totaling more than $120 billion. Annual exports, meanwhile, increased 23.49 percent to nearly $130 billion.
Industrial exports, which make up more than 80 percent of sales abroad, declined 25 percent in November, from last year. The contraction in Western Europe’s automotive markets hit Turkey hard, as exports of vehicles and automotive equipment dropped 38 percent from November 2007.
Mehmet Büyükekşi, president of the Turkish Exporters’ Assembly, or TİM, announced November export figures yesterday in Gebze. "Automotive is our largest exporting industry. We have to support the industry," Anatolia News Agency quoted Büyükekşi as saying. Automobile makers in Turkey, including the local unit of Ford Motor, suspended production in October and November, citing falling demand from Europe.
"Due to the [euro/dollar] parity movement and a slowdown with our main trading partner, the European Union, this was in line with our expectations," Oyak Securities economist Elif Gülay Girgin told Reuters.
In other developments, consumer confidence dropped to its lowest since at least 2002 in November as the global credit crisis hit the Turkish lira and threatened job losses, according to CNBC-e television channel.
The confidence index fell 1.5 points to 53.6, the lowest level since the measure was launched in 2002, the channel said in an e-mailed statement yesterday. The official statistics agency will announce its measure of November confidence Dec. 19. The YTL has lost about 19 percent of its value against the dollar since October.
Convincing argument?
As Turkish exports feel the crunch, government officials continued to stick to the line that the crisis will not affect Turkey as much as elsewhere. Based on external financing and foreign demand parameters, it can "easily be told" that the global crisis will have less of an impact on Turkey compared to other developing countries, said Deputy Prime Minister Nazım Ekren yesterday.
"Turkish foreign trade’s share in the global trade volume is 1 percent. A similar situation is also valid in capital movements," said Ekren, during a breakfast meeting with the members of the Economy Reporters Association, or EMD, in Ankara. Although Turkey’s integration into global markets is advancing, its share in the global system is still too little, said Ekren. "In short, Turkey is going through an integration process. Therefore, not all capital or trade movements will affect the country."
Two issues
However, Turkey will have to face two issues head on, external financing and foreign demand, he said. Looking into external financing, one needs to focus on direct investments, portfolio investments the country traditionally lures and the terms of loan maturity, Ekren said. When it comes to foreign demand, export data should be focused upon, he added. It certainly is important to obtain external funding, however, in this period it is even more important to utilize equity, Ekren said.
"Another reason that allows us to easily say Turkey will not be affected by the crisis as much as other developing countries is the country’s banking industry does not have a major share in its economy," Ekren said.
"A reason that allows us to easily say Turkey will not be affected by the crisis as much as other developing countries is that the banking industry does not have a major share in the economy," Ekren said. "Another reason is reciprocal investments among developed countries. There are serious financial investments in Australia, Spain, Sweden, Hungary and Iceland. Such investments do not exist here and therefore, Turkey does not have an emerging market risk," he said.
The Central Bank resumed the foreign exchange depot market and acts as the financial intermediary and regulator, Ekren said. If a new law is drafted on the return of loans acquired from abroad, then this can be added to foreign exchange liquidity generated by foreign funding. Also, more sources should be provided to Türk Eximbank, acting as the government’s major export incentive instrument, he said.