Turkey’s total foreign trade reached $302.4 billion in 2010. Exports were up 11.5%, reaching $113.9 billion, while imports saw a 31.6% year-on-year increase to hit $188.5 billion. This left a deficit of $74.6 billion, up from $38.6 billion in 2009 according to the Export Promotion Center of Turkey (IGEME). The challenge of the widening current account deficit is firmly on the government’s agenda, with the Central Bank of Turkey (CBT) pushing forward with a controversial policy of keeping interest rates low while increasing capital reserve requirements in a drive to devalue the lira and raise the competitiveness of Turkish exporters, while discouraging so-called “hot money” inflows.
Zafer Çağlayan, Turkish Minister of State for Foreign Trade, told TBY that “Turkey’s export success depends on nurturing its deepening relations with neighboring countries”. Alongside CBT policy, Turkey’s push to increase trade with its neighbors is also yielding results, with the total value of exports to neighboring and periphery countries reaching $49 billion in 2010, up from $9.2 billion in 2002. In terms of foreign trade, the Middle East has become a major partner with figures reaching $17 billion in 2010. Turkish Prime Minister Recep Tayyip Erdoğan has also shown his commitment to the Middle East region with high-profile trips to the Gulf and Northern Iraq in 2011. Minister Çağlayan told TBY that the US, China, Russia, India, Brazil, Jordan, Nigeria, Iran, Saudi Arabia, and Qatar would be Turkey’s main export targets in 2011, and export figures to these nations rose 20% in 2010. The country’s current top 10 export partners in that year were Germany, Italy, the UK, Iraq, France, Russia, the UAE, the US, Iran, and Spain.
In terms of exported products, Turkey is focused on sectors such as automotive, mining, and chemicals. Current export rates for high-technology products are 3.2%, and 29.7% for middle-technology products. In this context, the government is offering incentives to encourage R&D centers, and is developing its automotive, defense, and machine industry sectors in order to become a global export center.
© The Business Year