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Turkey's exports surge to all-time high of $225bn in 2021

Turkish exporters appear to have taken advantage of a weak Turkish lira and post-Covid rebound in global economy
A commercial vessel sails under the 15 July Martyrs Bridge, aka the Bosphorus Bridge, on the Bosphorus strait on 23 July 2021 in Istanbul (AFP)

Turkish exports surged to an all-time high in 2021 with a 32.9 percent increase, reaching a record-breaking $225bn, Turkish President Recep Tayyip Erdogan announced on Monday. 

Erdogan said Turkey’s trade deficit narrowed by 7.8 percent to $45.9bn and the ratio of exports to imports also reached 83.1 percent in the same year.

“We have recorded the biggest increase of exports to the United States,” Erdogan added. 

Erdogan’s announcement came as Turkey’s Statistical Institute said on Monday that the consumer price index also jumped to a high of 36.1 percent last month, up from 21.3 percent in November. 

The figure stands at its highest since 2002, when inflation reached 33.45 percent before Erdogan’s AK party came to power. 

The latest figures come as Turkey deals with a currency crisis where the Turkish lira has lost 44 percent of its value to the dollar in the last year. Average earnings in Turkey have also eroded in recent months due to the fall of the currency. 

The currency rebounded from an all-time low of 18.4 against the dollar last week after the introduction of a state scheme to protect local deposits from depreciation losses versus hard currencies.

Latest figures on Monday showed the lira standing at 13.14 against the dollar.

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The lira crisis was triggered by the Central Bank's aggressive interest rate cuts. Since August, the bank has cut its policy rate by 500 basis points, from 19 percent to 14 percent. Meanwhile, exports jumped 33 percent in November, reaching $21.5bn, while the current account posted a $3.16bn surplus for October. 

Unemployment has also decreased by about two percentage points, from 13.1 percent to 11.2 percent in October year-on-year. GDP grew by seven percent in the third quarter of 2021. 

Rising inflation pushed the government to raise the minimum wage by 50.4 percent as of 1 January 2022. Yet, as a result, the Erdogan administration announced a series of hikes in taxes and the price of utilities such as gas and power. 

The government hiked electricity prices between 50 percent and 125 percent and gas prices surged 25 percent.

The government increased other fines and taxes by 36.2 percent as well in accordance with the regulation that raises charges based on inflation.