Economists comment on important figures: What is the cost?

Renowned economist Mahfi Eğilmez evaluates foreign trade data announced by TURKSTAT. Bending, analysis of the truth behind the data reveals the numbers.

Mahfi Eğilmez's article on BBC Turkey:

"Turkey's Statistical Institute (TSI) according to the latest data is increasing Turkish exports, it fell to appropriate imports and because the trade deficit shrank. The narrowing of the trade deficit allowed a deficit reduction.

First of all, we must use TurkStat data.

According to the table, exports generally increased compared to last year. On the other hand, imports appeared to decline in general and the foreign trade deficit declined as a result of this development.

Last month, this situation became clear last month: exports increased 22.4 percent in September while imports fell 18.3 percent and the foreign trade deficit decreased by 77.1 percent.

This outlook is also reflected in the export coverage ratio. In September, the ratio of exports to imports rose to 88.5 percent, making it a record-breaking record.

If we look at the growth growth of setbacks at first glance at a development that is so pleasant to understand whether it really is a little more detailed, we need to do a deeper analysis.

Let's first define some of the concepts we will use in this analysis:

Foreign trade deficit: This is the difference between exports and imports. If a country imports more value than the value of the goods it exports, the balance of payments in that country means a foreign trade deficit. Turkey has a traditionally open trade economy. The foreign trade deficit increases in a period of high economic growth and economic growth, and vice versa. Because most of the inputs used in production in Turkey (around 65 percent) consist of imported goods. The higher the economic growth, the higher the production, the higher the production, the higher the foreign trade deficit. Foreign exchange is one of the important factors affecting foreign trade. When TL depreciates against foreign currencies and specifically against the dollar and Euro, which are the export and import currencies, an increase in exports and imports falls.

Trading requirements: This is a measure of the quantity of goods purchased and the exchange rate of goods. By comparing the prices of goods bought and sold in a given period, losses or profits in that period can be measured.
Value Index: This is an index used to measure changes in the total value of exports and imports. The base year dollar value is used in calculating the value index. The base year value index used by TurkStat is taken as 2010 = 100. Thus, the fact that an index of more than 100 means that the value of exports or imports is higher than the value of the base year and lower.

Quantity Index: This is an index that serves to show changes in the amount of exports and imports. In this case, the base year is taken as 2010 = 100 and an index of more than 100 means the amount of exports or imports is higher than the base year and lower is less.

Terms of trade: Export unit index value is obtained by proportion to the import unit value index. More than 100 foreign trade; foreign trade goods compared to the base year for sale cheap, cheap for countries that support the situation, under 100 is a situation against the state.
Now let's look at the summary table of the Foreign Trade Index for September 2018, which Turkstat published on November 9, 2018.

The table shows that the export unit value index decreased 2.3 percent compared to September 2017, while the import unit value index increased 2.6 percent in the same period. In this case, each exported unit produces less money and each imported unit is paid more.

In other words, the unit price of goods exported by Turkey has increased the unit price of goods that imports have fallen.

In this case, how has exports and imports declined? The answer to this question is also hidden in the quantity index. Although the table's export quantity index increased by 25.2 percent, the import quantity index fell 20.3 percent.

So Turkey sells goods for less cost.

The volume of foreign trade, which is calculated by dividing the export unit value index with the unit value index of imports and which is 106.6 in September 2017, fell 4.7 percent to 101.6 in September 2018.

When we consider the value and quantity index together, it is understandable that we increase exports by selling more goods at lower prices. Import is the opposite. We have taken less money. "