Turkish Foreign Trade Gap Widens to Record in August

By Steve Bryant

Sept. 26 (Bloomberg) -- Turkey's trade deficit widened in August to a record for a single month as higher global energy prices pushed up the import bill.

The gap grew to $8.1 billion from $5.9 billion in the year- earlier period, the statistics agency in Ankara said on its Web site today. The deficit was forecast at $7.5 billion, according to the median estimate of 10 economists surveyed by Bloomberg.

Turkey imports about 95 percent of the gas and oil it burns and higher global commodity prices may push the current-account balance to a record $51 billion this year from about $38 billion last year, according to the central bank's latest survey of economists. The widening imbalance threatens to weaken the lira as the global credit crunch reduces foreign investment in Turkey.

``The growing energy need makes the country more dependent on energy-exporting countries,'' Ozgur Altug, economist for Raymond James in Istanbul, wrote in a note to clients. ``In addition, rising energy prices do not allow an improvement.''

Imports increased 31 percent to $19.2 billion, from the year- earlier period, the agency said today. Imports of fuels and oils jumped to $4.5 billion from $2.8 billion a year earlier. Crude oil prices rose to about $120 per barrel in August, compared with about $70 a year earlier. Exports rose 26 percent to $11 billion in August, the statistics agency said.

Sales to the United Arab Emirates nearly quadrupled from a year earlier, reaching $953 million in August, just short of sales to Turkey's largest trading partner, Germany, which declined 2.5 percent to $1.01 billion.

The rise in exports to the Middle East reflects an increasing diversity in Turkish markets that may help bolster the country against a slowdown in European growth. Sales to the United Kingdom, the third biggest market, fell 8.6 percent while exports to Iraq, the ninth largest market, increased 48 percent.

The current-account gap, the broadest measure of trade in goods and services, was $47.1 billion in the 12 months through July, the central bank said on Sept. 10. That's about 7 percent of last year's gross domestic product.

To contact the reporter on this story: Steve Bryant in Ankara at sbryant5@bloomberg.net.