Today is again the day to comment on the recently announced data. A couple of days ago balance of payments data for May was announced. As we have been underlining, the global crisis affected Turkey most severely via two channels. First was that corporate and banking sectors encountered difficulties in accessing new loans from abroad. As a result of this, net fund transfers abroad took place. Second, exports were severely affected by global economic slowdown.

For a while we have been hearing positive developments with respect to exports. However we should also underline that for now the future outlook of exports is a bit complicated. The main reason for this is evidently the problems facing the European Union (EU) countries which receive almost 50% of Turkey's exports. It is expected that the growth rate of the mentioned countries will be quite low.

For instance, according to the revised estimates by the International Monetary Fund (IMF), EU's growth rate in 2010 and 2011 will be the lowest in the world. EU is expected to grow by 1% in 2010 and 1.6% in 2011. And the IMF revised downwards the growth estimate for 2011 by 0.2 points. Expected growth rate for Japan, which suffers from not growing for a long time, is even higher.

So, what is the current state considering exports? The most recent data announced by TURKSTAT is for May. Turkey's exports in Dollar terms continue increasing. On the other hand, the rate of growth of the exports in Euro terms tended to decrease over the last three months. Figures net of seasonality indicate that the rate of increase is 3.8, 2 and 0.9%, respectively. Of course we should not make 'big' conclusions out of the data for the last three months. But also considering the growth estimates for the EU, we could say that Turkey's exports to the EU turn on the warning lights if not set the alarm.

On the website of the Undersecretariat of Foreign Trade, more recent data can be found. However, the data only gives the total exports in Dollar terms. So we cannot analyze exports in Dollar terms and in Euro terms separately. Therefore, we cannot see exports net of the recent major volatilities in Euro-Dollar parity.

According to this data, exports in Dollar terms net of seasonality decreased in June compared to May. Exports in the first thirteen days of July did not change compared to the same period in June. Another warning: yesterday, the 12-day comparison revealed a fall in exports in July. Thus, we should not reach a conclusion based on such short term data. However, the 12-day comparison is in the same direction with the May-June comparison. What is more, in the first half of July, Euro appreciated against Dollar. To put it differently, the reason for this is not the depreciation of the Euro against Dollars which would reduce the Dollar value of the exports.

I have commented on the net amount of foreign credits banking and corporate sectors access. Balance of payments data for July suggest that finally these sectors are not net foreign debt re-payers. For the corporate sector this is the first time the picture changes since December 2008. In short, if proves permanent, this is a favorable development considering growth performance.

This commentary was published in Radikal daily on 15.07.2010