Trade, Current Account, Reserves and the Import-Intensity Problem
ABSTRACT
This brief compiles Türkiye’s external position through the first half of 2026, separating the price effect of the energy shock from the structural import intensity of the production system, and records the reserve and corporate balance-sheet position against which the deficit is financed.
1. Half-year trade position
Exports in January–June 2026 reached 135.98 billion dollars, an increase of 3.5 percent on the same period of 2025. Imports reached 189.12 billion dollars, up 4.6 percent. The trade deficit widened by 7.4 percent to 53.14 billion dollars, and the ratio of exports to imports fell from 72.6 percent to 71.9 percent.
On a twelve-month rolling basis to June 2026, exports stood at 277.9 billion dollars, up 4.1 percent, and imports at 373.7 billion, up 4.9 percent. Full-year 2025 exports were 273.4 billion dollars.
2. June detail and the energy signature
June 2026 exports rose 21.7 percent year on year to 24.92 billion dollars and imports rose 23.0 percent to 35.29 billion, producing a monthly deficit of 10.37 billion dollars, 26.2 percent above June 2025. The coverage ratio fell from 71.4 to 70.6 percent.
Excluding energy products and non-monetary gold, the same month’s exports were 23.30 billion dollars and imports 28.02 billion, giving a deficit of 4.71 billion and a coverage ratio of 83.2 percent. The comparison is the central diagnostic in this brief: energy and gold together accounted for more than half of the monthly trade gap. The underlying non-energy, non-gold trade position is substantially stronger than the headline figure indicates.
3. Composition
Intermediate goods constituted 71.5 percent of first-half imports, capital goods 14.0 percent and consumption goods 14.1 percent. In June specifically the intermediate share was 71.4 percent with capital and consumption goods at 14.2 percent each.
On the export side, manufacturing supplied 93.8 percent of first-half exports, agriculture, forestry and fishing 3.7 percent, and mining and quarrying 1.8 percent. Germany was the largest single export destination in June at 1.97 billion dollars, followed by the United States, Italy, the United Kingdom and Spain, with the top five accounting for 29 percent of exports. China was the largest import source at 5.28 billion dollars.
The intermediate goods share is the structural finding. A production system in which more than seven tenths of imports are inputs to domestic manufacturing has a mechanical property: any acceleration in domestic output raises imports before it raises exports, with a lag corresponding to the production cycle. This applies to consumption-led growth, to investment-led growth and to reconstruction spending alike.
4. Export composition and the technology transition
Two compositional series qualify the headline reading. The combined share of high and medium-high technology products in total manufacturing exports reached a record 43.5 percent at the end of 2025, reflecting growth in defence and aerospace, the automotive transition and chemicals and pharmaceuticals. High-technology products alone accounted for approximately 3.6 percent of exports nationally, with Ankara at roughly double that share and contributing about 1.7 billion dollars in high-technology exports.
Defence and aerospace illustrate the direction. The sector exported 10.05 billion dollars in 2025 against 7.1 billion in 2024 and 4.4 billion in 2022, raising its share of total exports from 1.7 to 3.7 percent in three years, with new contracts of 17.8 billion dollars signed during 2025.
Export concentration remains high on both the firm and geographic dimensions. Istanbul alone accounted for approximately 56.9 billion dollars of 2025 exports, and the five largest exporting provinces together for more than half the national total. Free zone exports in the first half of 2026 showed technology-intensive products at 57.6 percent of the total, rising to 58.9 percent in June, on total free zone trade of 14.3 billion dollars for the half year.
Foreign-invested firms accounted for approximately 30 percent of Turkish exports in 2025, concentrated in motor vehicles and machinery. This is a material share and it links the export trajectory to the inward investment climate: global foreign direct investment flows rose 14 percent to 1.6 trillion dollars in 2025 according to UNCTAD, and Türkiye’s capture of that flow determines a meaningful portion of future export capacity.
5. Current account and financing
The current account deficit for 2025 was approximately 25.2 billion dollars, or roughly 1.5 percent of gross domestic product. By April 2026 the annualised deficit had widened to 36.98 billion dollars, and the annualised trade deficit to 94.7 billion, up 9.2 percent.
Price and volume effects can be separated in the April data. The export volume index rose 7.6 percent while the import volume index fell 7.3 percent; the export unit value index rose 13.7 percent and the import unit value index 11.3 percent. Volumes were therefore moving favourably while values were not, which is the signature of a terms-of-trade shock rather than a competitiveness loss.
The Medium-Term Programme for 2026–2028 projected current account deficits of 22.3, 20.5 and 18.5 billion dollars respectively, corresponding to roughly 1.3, 1.2 and 1.0 percent of output. Those projections predate the February 2026 energy shock and the realised April annualised figure already exceeds the 2026 projection by a substantial margin.
6. Reserves and balance sheets
Central Bank gross international reserves rose by 35 billion dollars during 2025 to approximately 190 billion, comprising roughly 75 billion in foreign exchange and 115 billion in gold, and stood at approximately 207.5 billion dollars in early February 2026. Net reserves rose by 13 billion to approximately 77 billion, or 79.6 billion on an alternative measure, with swap transactions falling by 5 billion.
The corporate balance sheet position moved in the opposite direction. Non-financial firms’ foreign currency assets rose by 27 billion dollars during 2025 to 184 billion, while their foreign currency liabilities rose by 67 billion to 373 billion. The net short foreign currency position therefore widened from 148 billion to 189 billion dollars. Total debt stood at 92 percent of output, comprising 10 percent for households, 38 percent for real sector firms and 17 percent for financial institutions. Long-term external debt was 22 percent of output and short-term 10 percent.
The fiscal position provides some offset: the budget deficit fell below 3 percent of output, with revenues at 20 percent and expenditures at 23 percent.
7. Reading
Three conclusions follow from the data. The deterioration in the first half of 2026 is predominantly a price effect: export volumes grew, import volumes fell, and unit values moved against Türkiye following the February energy shock. The non-energy, non-gold balance is materially stronger than the headline, with a coverage ratio above 83 percent in June. And the structural constraint is import intensity: with intermediate goods at more than 71 percent of imports, growth of any composition widens the deficit before it narrows it.
The forward risk is concentrated in 2027 rather than 2026. Oil-indexed gas contracts transmit price changes with a lag of roughly nine months, so the largest increment to the energy bill arrives in the year in which the disinflation path requires its steepest fall and in which the current account projections were set before the shock.
8. Data notes
Foreign trade figures are provisional and produced under the general trade system by TÜİK in cooperation with the Ministry of Trade; revisions are routine. Current account and reserve figures are Central Bank data. Annualised figures are twelve-month rolling sums and are not seasonally adjusted. Reserve composition is sensitive to gold price movements, so the gold component of gross reserves should not be read as a discretionary policy variable.
SOURCES
TÜİK and Ministry of Trade, Foreign Trade Statistics, June 2026, released July 2026.
Presidency of Strategy and Budget, commentary on June 2026 foreign trade data and current account indicators, 2026.
Central Bank of the Republic of Türkiye, balance of payments and international reserves statistics.
Banks Association of Türkiye, Economic Developments and the Banking System 2025.
Ministry of Treasury and Finance, economy presentation, February and July 2026 editions; Medium-Term Programme 2026–2028.
Central Bank of the Republic of Türkiye, Inflation Report 2026-II, 14 May 2026.
Furkan Mahmut Tameroglu