Oil slump al­lows Turkey to record small­est trade gap since 2009

The Pak Banker - - COMPANIES/BOSS -

The slump in crude oil prices gave Turkey its small­est trade deficit since 2009, re­duc­ing the need for for­eign cur­rency to plug the gap.

The an­nual short­fall shrank by more than a quar­ter to $63.3 bil­lion last year, Turkey's sta­tis­tics in­sti­tute said in a state­ment on its web­site on Fri­day. Cheaper en­ergy im­ports ac­counted for more than half of the im­prove­ment.

Turkey's trade gap fell to $6.18 bil­lion in De­cem­ber from $8.5 bil­lion a year ago, wider than the me­dian es­ti­mate of $6 bil­lion in a Bloomberg sur­vey. Im­ports plunged 17.5 per cent to $18 bil­lion, com­pared with an 11 per cent drop in ex­ports to $11.8 bil­lion. Turkey's en­ergy bill stood at $37.8 bil­lion in 2015, down from $54.9 bil­lion a year ear­lier.

A weak­en­ing cur­rency also helped Turk­ish man­u­fac­tur­ers, though the ben­e­fit was off­set by the loss of trade routes due to vi­o­lence in Syria and be­cause some of Turkey's big­gest trade part­ners are oil ex­porters. Over­all, Turkey ben­e­fited from the com­modi­ties rout as it nar­rowed its cur­rent-ac­count deficit, re­duc­ing the need to fi­nance the short­fall with cap­i­tal in­flows, ac­cord­ing to En­ver Erkan, an an­a­lyst at ALB Forex in Istanbul.

"The main story ex­plain­ing im­ports is the fall in crude oil, which ben­e­fited buy­ers like Turkey while hurt­ing the economies of oil ex­porters," Erkan said. "As a re­sult, the fall in im­ports was much sharper than the de­cline in ex­ports."

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