Turkey records its lowest trade deficit in nearly 4 years in August, according to the Trade Minister's announcement

Turkey's economy is showing signs of strength, with exports expected to surpass $390 billion by the end of 2025. This optimistic projection comes as the country's combined goods and services exports stood at $21.8 billion in August, just 0.9% lower than the previous year.

The export-to-import coverage ratio for the 12-month period slipped to 75.5%, but the ratio of the deficit to total trade flows eased to 9.6% in August, compared with 13-14% earlier in the year. This improvement is largely due to a 4.3% increase in exports from January through August, reaching $178.1 billion.

Trade Minister Omer Bolat stated that the deficit fell 16.7% from a year earlier, with imports dropping 3.9% to $26 billion, marking their lowest level in 14 months. Despite this, the 12-month total of imports reached $340.5 billion, leading to a trade deficit of $87.5 billion for the period.

Services exports provided some relief in reducing the overall trade gap. As of June, the 12-month total of services exports had already reached $117 billion, and Bolat expects the year-end target of $121 billion in services exports to be comfortably met.

Turkey's economy is on track to reach a GDP of $1.5 trillion by year-end, a prediction made by an unnamed Turkish Minister. The Turkish economy expanded by 4.8% in the second quarter, further supporting this optimistic outlook.

Moreover, Turkey aims to rank among the top 10 global defense exporters. To achieve this goal, companies have been strategically front-loading exports, as evidenced by the $2.5 billion increase in exports in July to counter the anticipated August slowdown due to seasonal factors such as factory maintenance and employee leave.

Despite these positive signs, the current account balance-to-GDP ratio in the second quarter of 2025 widened to -1.29%. This indicates that Turkey still has work to do to fully address its trade imbalance.

However, August saw a significant improvement, with Turkey recording its lowest monthly trade deficit in 46 months at $4.2 billion. This is a promising step towards achieving the country's economic goals.

Turkey records its lowest trade deficit in nearly 4 years in August, according to the Trade Minister's announcement