TIM’s July results reveal a slight decline in Turkiye’s export demand and market resilience, reflecting ongoing economic uncertainties.
Turkiye’s Export Market Monitor for July, released by the Turkish Exporters Assembly (TIM), presented a nuanced picture of the country’s export landscape. The monthly report, which tracks export demand and market resilience, revealed slight declines in both indices, indicating ongoing challenges in key global markets.
Turkiye’s Export Demand Index
The Export Demand Index for July stood at 99.3 points, reflecting a 1% month-on-month and a 0.6% year-on-year decline. This marked a level below the long-term reference value, signaling a dip in demand for Turkish exports.
- Monthly Decline: The 1% decrease in the index compared to the previous month underscores a softening in demand conditions, particularly in response to ongoing global economic uncertainties.
- Yearly Comparison: On a year-over-year basis, the 0.6% drop indicates that demand remains fragile, especially in markets heavily influenced by macroeconomic volatility.
Factors Influencing Export Demand
Several factors contributed to the subdued performance of the Export Demand Index in July:
- Economic Confidence: Deterioration in business and consumer confidence played a significant role, as inflation expectations showed only limited improvement.
- Inflation Concerns: While there were signs of easing inflationary pressures, the gains were not substantial enough to restore confidence among consumers and businesses. The prevailing concerns over future economic conditions continued to weigh on overall demand.
- High Interest Rates: Elevated interest rates, coupled with uncertainty in price levels, further constrained consumer spending and investment decisions, leading to a reduction in demand for exported goods.
Market Resilience Index
The Market Resilience Index, which measures the ability of export markets to withstand economic and geopolitical risks, registered at 99.7 points in July. This represents a marginal decrease of 0.1% month-on-month but a slight annual increase of 0.1%.
- Monthly Variation: The small dip in the index suggests that despite some improvement in geopolitical risk conditions, economic risks and uncertainties continue to challenge the resilience of key export markets.
- Yearly Gain: On an annual basis, the index showed a modest improvement, indicating that some markets are gradually adapting to the prevailing risks, although not sufficiently to meet long-term averages.
Global and Domestic Influences
The Export Market Monitor’s findings come at a time of mixed signals in both global and domestic economies:
- Geopolitical Risks: Although there was a partial improvement in the global geopolitical risk index, persistent economic uncertainties have tempered market optimism.
- Domestic Challenges: In Turkiye, economic conditions remain strained by inflation and high-interest rates, factors that have dampened consumer and business confidence, further affecting export performance.
What’s Next for Turkiye?
As Turkiye navigates through these challenging economic conditions, the Export Market Monitor underscores the importance of closely monitoring both domestic and international developments. The slight declines in both the Export Demand Index and Market Resilience Index highlight the need for strategic measures to boost confidence in key markets and sustain export growth.
Key Takeaways:
- Export Demand: A decline in demand driven by economic uncertainty and cautious consumer behavior.
- Market Resilience: Marginal improvement in resilience, but economic risks remain a concern.
- Outlook: Continued vigilance is required to navigate the evolving economic landscape and support export markets.
The July results serve as a reminder of the delicate balance required to maintain Turkiye’s export momentum in an increasingly complex global environment.
Source: AA / Prepared by Irem Yildiz