Export Climate Index in Istanbul
The manufacturing export climate index in Istanbul, as reported by the Istanbul Chamber of Industry, decreased from 52.8 in May to 51.6 in June. This indicates a softer strengthening of the export climate compared to previous months, and is the lowest level since March.
Global Demand Conditions
Despite the slight decrease in the export climate index, demand conditions in the export markets of Turkish manufacturers continued to improve in June. This was driven by strong growth in the United Arab Emirates and increased business activity in the U.S. The economic recovery in Europe showed signs of slowing down, affecting the rate of improvement.
Positive Trend
Since the beginning of 2024, the export climate index has remained above the 50 mark, indicating a positive trend in demand conditions for Turkish manufacturers. June marked the sixth consecutive month of improvement in export markets, with the United Arab Emirates showing the strongest expansion in business activity. The U.S. also remained a key area of strength for Turkish exports.
Turkish Exports and Business Activity
In June 2024, Turkish exports experienced a decline of 10.6 percent compared to the previous year, totaling $18.6 billion. This decrease was attributed to the long Eid al-Adha holiday during the month. Imports also saw a decrease of 4.1 percent, reaching $25 billion, resulting in a foreign trade deficit that widened by 21.4 percent to $6.4 billion.
International Markets
The United States accounts for 6 percent of Turkish manufacturing exports and is the second-largest market for Turkish goods. Meanwhile, Germany remains the largest single destination for Turkish manufactured products. Although business activity in Germany saw a slight decrease at the end of the second quarter, demand conditions for Turkish exporters are still positive, according to Andrew Harker, the economics director at S&P Global Market Intelligence.
Outlook for Turkish Exports
Despite a slowdown in growth in June, the overall outlook for Turkish exports remains optimistic. In the first half of 2024, exports amounted to $125.5 billion, marking a 2 percent increase from the previous year. This suggests that Turkish exporters are still benefitting from favorable demand conditions in international markets.
The Economic Growth of Turkey
Turkey has seen significant economic growth in recent years, becoming one of the fastest-growing economies in the world. This growth can be attributed to various factors, including a young and dynamic population, strategic location between Europe and Asia, and a diverse economy.
The Turkish economy has been diversifying beyond traditional industries such as agriculture and textiles, with a focus on technology, tourism, and manufacturing. The government has also implemented reforms to improve the business environment and attract foreign investment.
As a result, Turkey has become a hub for startups and innovation, with a thriving entrepreneurial ecosystem. The country’s GDP has been steadily increasing, and it is poised to become a leading player in the global economy in the coming years.
