Cablegate: Turkish Exports Boomed in 2007

VZCZCXRO4871
RR RUEHDA
DE RUEHAK #0023 0041538
ZNR UUUUU ZZH
R 041538Z JAN 08
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 4846
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUEHIT/AMCONSUL ISTANBUL 3710
RUEHDA/AMCONSUL ADANA 2578
RUEHBS/USEU BRUSSELS

UNCLAS ANKARA 000023

SIPDIS

TREASURY FOR INTERNATIONAL AFFAIRS - JROSE
USTR

SENSITIVE
SIPDIS

REF: ANKARA 2052

E.O. 12958: N/A
TAGS: EFIN TU
SUBJECT: Turkish Exports Boomed in 2007

1. Summary: Turkish exports reached USD 105.9 billion in 2007,
enjoying a 23.5 percent increase from 2006 and surpassing the
official target of USD 100 billion. Turkish State Minister for
Trade, Kursad Tuzmen, said 2008 exports would continue to be the
locomotive for Turkey's economic growth. The GOT has set a 2008
target of USD 117 billion in export revenue, while Minister Tuzmen
uses a figure of USD 125 billion in his public remarks. End
Summary.

2. According to January 2 data released by the Turkish Exporters
Association (TIM), Turkish exports jumped 23.5 percent in 2007,
reaching USD 105.9 billion. Even though official Turkstat numbers
for 2007 will not be released until the end of January, TIM's data
generally tracks closely with Turkstat figures.

3. Trade Minister Tuzmen has long been critical of the free floating
exchange rate regime used by the Central Bank since 2001, claiming
the free float hampers Turkey's competitiveness in foreign markets.
According to TIM data, the machinery sector lead with a 43 percent
increase over 2006, automotive and automotive spare parts increased
35 percent, and iron/steel increased 31.3 percent. The total
industrial sector share was 86.7 percent in 2007, reaching USD 91.9
billion. In 2007, most of Turkey's exports were made to Germany
(USD 11.9 billion), the United Kingdom (USD 8.3 billion), Italy (USD
7.4 billion), France (USD 5.9) and Russia (USD 4.8 billion).
Turkish exports to the U.S. were USD 4.0 billion, or 3.7 percent of
total Turkish exports.

4. Comment: Turkey imports many raw material components that it
exports as finished goods. While the increase in exports is good
news, Turkey's heavy dependence on imports contributes to the high
current account deficit, which is now eight percent of GDP. End
Comment.

McEldowney

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