Türkiye’s trade deficit continued to rise in January while the economic confidence index witnessed a sharp decline.
Türkiye’s foreign trade deficit widened 38.4 percent year-on-year to $14.237 billion in January, official data showed on Monday, with imports surging 20.7 percent and exports up 10.3 percent.
The Turkish Statistical Institute said imports climbed to $33.606 billion in January, while exports rose to $19.369 billion.
The overall foreign trade deficit surged 137 percent year-on-year to $109.54 billion in 2022 in Türkiye, the data showed.
The Institute said that Türkiye's exports rose 12.9 percent to $254.1 billion last year, while imports rose 34 percent to $363.7 billion.
Under an economic program unveiled in 2021, Türkiye aims to shift to a current account surplus through stronger exports and low-interest rates, despite soaring inflation and a currency that has tumbled in recent years.
Türkiye's economic confidence index fell 0.3 percent month-on-month in February to 99.1 points, following massive earthquakes that devastated the country's southern region, data from the Turkish Statistical Institute showed on Monday.
The index, which points to an optimistic outlook when above 100 and pessimistic when below, hit a record low in 2020 before recovering as coronavirus measures were eased.
The government introduced a series of measures to ease quake fallout that is expected to cost at least $50 billion. But economists have predicted it will shave some 1-2.5 percentage points off economic growth this year.
Türkiye’s sovereign wealth fund plans to channel cash into the nation’s main stock exchange via exchange-traded funds, in an open-ended attempt to keep the equities market from falling, according to Bloomberg.
The fund will allocate at least $1 billion initially to ETFs run by a state bank, according to people familiar with the matter.
The move differs from previous attempts to support equities since the Borsa Istanbul resumed trading following a halt caused by two devastating earthquakes on February 6. The government initially channeled pension funds’ money into the stock market to reverse the rout after the natural disaster.
The plan is to use ETFs currently run by Ziraat Portfoy, the asset-management arm of state lender T.C. Ziraat Bankasi A.S., the people said. The funds track the performance of various indexes related to Borsa Istanbul.
Domestic investors have become the dominant force in Borsa Istanbul in the past several years as they sought protection against rampant inflation.
The exact size of the fund at its inauguration will be determined once all the TVF companies, such as Turkish Airlines, report 2022 earnings, one of the people said.
Ziraat has several ETFs tracking Türkiye’s main stock exchange, with some focusing on large companies only, such as those listed in the Borsa Istanbul 30 index. Ziraat Portfoy’s BIST 30 Index Fund, the biggest local ETF for Turkish stocks, has already seen 8.1 billion liras ($430 million) in inflows since February 15, according to Bloomberg data.
The Istanbul exchange’s main index, the BIST 100, has a market cap of about $220 billion.
The average trading volume in the past month was about $160 million a day, according to data collected by Bloomberg.
Indexes tracking larger companies will likely be the priority target for the sovereign wealth fund and the buying program has no expiration date, the people said.
