The country to which we export the most in November is Germany, followed by England, Iraq and the USA. In import items; Germany took the first place in November 2020, followed by China, Russia and Switzerland. Looking at the goods groups, exports of investment goods and raw materials increased, while exports of consumption goods decreased. It is seen that imports have increased by double digit and strong single digit in all categories (investment, consumption, raw materials).
The foreign trade deficit continues to increase on an annual basis. In addition to the deterioration trend in the foreign trade deficit due to the increase in imports, it is observed that there is also a contraction on the export side. The most important reason for the decline in exports is the global increase in Covid-19 cases and this bringing back shutdown measures. Thus, exports are suppressed in the already weak global trade dynamics. The fragility in the external demand outlook will continue to pose a downside risk for exports.
Although imports maintain their strong upward trend, the consumption trend, which is the most important reason for this increase, may be suppressed with the slowdown in the coming months. When we look at the reasons for the strong increase in imports in the 11-month period, the strong consumption trend, which was effective especially in 3Q20, and the increasing gold imports on an annual basis are observed. As a matter of fact, precious metals were the subject of more than half of total imports with 2.66 billion USD in November. In the following months, a decrease in imports may occur with the change in consumption-related conditions. Tightening domestic financial conditions, slowdown in loan growth and further normalization will be effective in this. However, we expect the trend in foreign trade deficit to continue in the same way throughout the year, as we see epidemic and foreign demand-based risks on exports.
