Turkey exported a record amount of goods and services last year. In total, $254 billion (€238 billion) has been transported abroad, President Recep Tayyip Erdogan said in a televised address on Monday.
Exports were boosted by the cheap Turkish lira and strengthening economic relations with Russia. Turkey does not participate in Western sanctions against Russia and has started to trade more with the Russians. Turkish goods worth $1.3 billion were exported to Russia in December, double the amount in 2021.
Also, the Turkish stuff has gotten significantly cheaper for foreign countries in recent years. This is the result of Erdogan’s special interest rate policy. While most of the world battles inflation with higher interest rates to slow down the economy, the Turks continue to add fuel to the economic fire by lowering interest rates. This causes the value of the Turkish lira, the national currency, to decrease.
This also has a downside – foreign products are becoming more expensive for the Turks. As a result, the total value of imports increased by 34% compared to 2021. As a result, the Turks ended up with a negative trade balance (exports minus imports) of $110 billion.
The fact that buying foreign products is becoming more expensive is also reflected in inflation: price increases in Turkey have been more than 80% since August. Skyrocketing inflation has not yet led to a change in interest rate policy.
