Turkiye’s foreign trade deficit rose 143.7 percent during the first seven months of this year, to $62.18 billion.
The Turkish Statistical Institute data showed yesterday that the deficit in July rose 147 percent on an annual basis to 10.69 billion dollars, with imports rising 41.4 percent.
According to “Reuters”, imports amounted to $29.24 billion, while exports rose 13.4 percent to $18.55 billion.
Under an economic program unveiled last year, Turkiye aims to shift to a current account surplus by increasing exports and lowering interest rates, despite rising inflation and currency depreciation, but the sharp rise in global energy and commodity prices has made this more difficult to achieve. Target.
In addition, the Turkish Statistical Institute said yesterday, “The confidence index in the economy rose 1 percent on a monthly basis in August to 94.3 points.”
The Turkish Central Bank surprised the markets by cutting the interest rate by one hundred basis points to 13 percent, saying that it “needs to continue to drive economic growth despite inflation rising to nearly 80 percent and a global trend among other central banks to tighten policies.”
The bank kept the interest rate at 14 percent for the past seven months after cutting it by 500 basis points at the end of last year, in a series of cuts that led to a historic currency crisis and pushed inflation to its highest levels in 24 years.
The Central Bank’s Policy Committee said that the main indicators indicated a loss of momentum in economic activity in the third quarter, which prompted it to act.
“It is important that financial conditions remain supportive to maintain the growth momentum in industrial production and the positive trend in employment at a time of heightened uncertainty regarding global growth as well as heightened geopolitical risks,” it said in a statement.
The bank last month raised its year-end inflation forecast to 60.4 percent, compared with the average expert estimate of 70 percent, and it expects the annual consumer price index to peak near 90 percent this fall.
The Turkish monetary policy caused the local currency to depreciate by 44 percent against the dollar in 2021. The Turkish lira has also lost more than 25 percent against the dollar since the beginning of January, despite the intervention of the Central Bank and the announcement at the end of June to support the Turkish lira.
“Senseless with 80 percent inflation and continuing to rise,Turkiye’s central bank is cutting rates unexpectedly,” Timote Ash, an economist at Ploasat Management and an expert on Turkiye’s economy, promised in a tweet on Twitter.
Turkiye has witnessed double-digit inflation since the beginning of 2017, and it has not seen a similar rise in prices since the Turkish President’s Justice and Development Party came to power in 2002.
The opposition and independent economists accuse the National Bureau of Statistics (TOEIC) of reducing inflation to more than half.