Is the foreign trade data for September really so good?
If we ignore the facts that underlie the figures we can say that the foreign trade data for September is excellent: exports increased by $2.6 billion, or 22.4 percent. At the same time, imports decreased by $3.7 billion, or 18.3 percent. The foreign trade deficit fell by 77.1 percent, or $6.3 billion. Our exports approached our imports. The ratio of imports to exports has reached 88.5 percent.
What has happened? Did oil gush from our land or have we found natural gas so we can now reset our imports? What did we do to bring imports down from the $3.7 billion last year?Let’s explain it in the simplest terms. In September of last year, we imported $1.4 billion of gold. This year’s gold imports are $448 million. In other words, about one billion dollars of the $3.7 billion reduction in imports is based on gold.
About seven classes of imports comprise two-thirds of all imported products. There is, of course, the 27th class that includes oil and natural gas. Imports of this class increased by $496 million year-onyear in September.
Imports in the 71st class, mostly consisting of gold, fell by $859 million, electrical machinery and apparatus by $731 million, motor vehicles by $694 million, and investment goods by $553 million. Plastics, plastic products and iron and steel, respectively, fell by $239 million and $221 million.
Let us further simplify: In September this year, imports of inter- mediate goods decreased by approximately $2 billion, consumer goods imports decreased by $1 billion and investment goods imports decreased by $700 million.
All great f our a m s zero growth
Turkey reduced imports for production almost to a minimum in September. The industrialists had no other choice: imports have become so expensive because of the high exchange rate the industrialists have realized sales will be restricted by the cost of production, so they have hit the brakes on imports. The dollar average was 5.73 in August and rose to 6.37 in September. The October average was 5.86. The euro shows the same trend. The euro average was 6.61 in August, climbed to 7.42 in September, and was back down to 6.74 in October. It is not surprising that imports have shrunk in September due to this rapid increase in exchange rates.
However, the fact that imports have diminished this much is nothing to celebrate. If this reduction was due to the import of energy, and if it did not consist of intermediate goods imports, it would have been really great. But all data show that this decrease in imports is a reduction that will lead to a slowdown in production and growth.
Even 3.8 percent w ll be d ff cult
In the new economy program, growth for this year is estimated at 3.8 percent. In order to reach 3.8 percent, growth in the second half of the year should be 1.8 percent.
However, it may be difficult to achieve even 1.8 percent. Imports contracted by nearly 16 percent in the third quarter. Let us emphasize once again: This downsizing in imports means less production. If imports continue to contract also in the last quarter, we cannot maintain 1.8 percent in the second half of 2018, and we cannot prevent the yearly growth rate falling below 3.8 percent.