Turkey’s trade gap widens in November as gold imports rise

Turkey’s trade deficit widened for the fourth month in November from a year earlier as strong demand for gold drove imports higher.

The trade gap widened 154% to $5.03 billion from a revised $1.99 billion in the same month a year earlier, Turkstat said on its website on Thursday. The median estimate of eight analysts surveyed by Bloomberg was $5.1 billion.

The deteriorating foreign trade imbalance has been mainly driven by a credit explosion underpinned by interest rates kept below the country’s inflation. A weaker lira fueled price gains to well over 10% and spurred a rush for gold, an attractive store of wealth for Turkish consumers at times of currency volatility and high inflation.

Key Insights

• Imports rose 15.9% to $21.1 billion from a year ago, driven by $2.66 billion in precious metal purchases including gold
• Exports were down 0.9% to $16.1 billion as demand in key markets remained weak due to the coronavirus pandemic
• The export-import coverage ratio declined to 76.2% from 89.1%
• The January-November trade gap widened 82.5% to $45.3 billion