Well, not really....
But the 17.5% decline in exports was significantly lower than expected (exports turned out to be USD9.3bn versus expectations of USD 8.7bn). Normally, such a divergence from expectations would not get my attention; after all, forecasting is a difficult task. But exports forecasts have mostly been on the mark in the past because they use the Turkish Exporters Association preliminary exports data (released on the first day of the month), which closely follow the official figures.
Moreover, at USD 12bn, imports turned out to be lower than expected (USD 12.7bn), resulting in a trade deficit of USD 2.7bn versus expectations of USD 3.9bn (even though the divergence here is much larger, I do not find this as interesting, as imports are much tougher to forecast). The November trade figures led me to a small brainstorming session:
But the 17.5% decline in exports was significantly lower than expected (exports turned out to be USD9.3bn versus expectations of USD 8.7bn). Normally, such a divergence from expectations would not get my attention; after all, forecasting is a difficult task. But exports forecasts have mostly been on the mark in the past because they use the Turkish Exporters Association preliminary exports data (released on the first day of the month), which closely follow the official figures.
Moreover, at USD 12bn, imports turned out to be lower than expected (USD 12.7bn), resulting in a trade deficit of USD 2.7bn versus expectations of USD 3.9bn (even though the divergence here is much larger, I do not find this as interesting, as imports are much tougher to forecast). The November trade figures led me to a small brainstorming session:
- Is the divergence between TEA and official figures a one-time thing, or is it going to be more frequent in the future. If so, why?
- More generally, does the divergence simply reflect the uncertain environment, as I have argued in an earlier column. I'd say maybe for the imports, but definitely a no for exports.
- Everyone has been raving about the need to get into global supply chains. Could it be that countries more integrated in global chains, such as China, will see their exports retract more. The November figures support this, with exports from China, South Korea and Taiwan retracting fast, along with commodity-exporters like Chile.
- Is the worldwide retraction in exports due to financing woes or does it reflect the pullback of global demand (see Econbrowser for more on this).
- How much of the retraction is due to the recent rise in protectionism (see a recent article in the Economist for more). Could protectionism stage a comeback in 2009?
All these questions are relevant for Turkey since if exports pull back stronger than expected, we may not see the slight positive contribution to growth from net exports. So the better than expected November exports figure, if it will not be revised later on, is definitely a figure on the positive side, but trade figures will be important to watch in 2009.
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