Turkey’s trade gap grows as easing chip crisis boosts car demand

Turkey’s foreign trade deficit widened 3.7% on an annual basis in March, as record exports failed to offset rising imports of gold and vehicles.

The deficit grew to $8.57 billion from last year’s $8.27 billion, preliminary Trade Ministry data showed on Tuesday, with Trade Minister Mehmet Mus citing rising demand for vehicles as the global shortage of semiconductors eases.

Gold imports jumped 63% to $1.7 billion, he added. Turks use the precious metal as a hedge against inflation and the declining value of the lira.

Turkish President Recep Tayyip Erdogan has championed low interest rates and cheap lending to business in order to boost domestic production and cut reliance on imports. But the strategy has fueled inflation and companies say the currency hasn’t depreciated enough to make exports competitive. 

Key insights

• Exports rose 4.4% year on year to a record $23.6 billion
• Imports rose 4.2% year on year to $32.2 billion
  • Energy imports were $6 billion
• Trade deficit in 1Q rose 31.5% year on year to $34.9 billion