Oil slump allows Turkey to record smallest trade gap since 2009
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."