Turkey's share of EU imports has reached a historic high of 4.1%.

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The analysis titled "The Impact of Demand Conditions and Market Share Developments on Turkey's Exports to the EU" published on the Central Bank of the Republic of Turkey (CBRT) blog page, Merkez'in Güncesi, notes that Turkey has significantly increased its share in the European Union (EU) market recently, and this increase has spread across many sectors. It is reported that with the expected increase in the EU's import demand in the coming period, alongside market share gains, the rise in external demand is also expected to support our exports.

DESPITE A DECREASE IN DEMAND, TURKEY'S EXPORTS INCREASED

The analysis titled "The Impact of Demand Conditions and Market Share Developments on Turkey's Exports to the EU," prepared by Altan Aldan, Deputy General Manager of Structural Economic Research at the CBRT, and Assistant Expert Didem Yazıcı, was published on the CBRT's blog page, Merkez'in Güncesi.

The analysis emphasizes that external demand has lost momentum in 2023 due to the effects of global monetary tightening, limiting export growth. However, it was highlighted that Turkey's exports increased by 3.9% in the first 8 months of 2024 compared to the same period of the previous year, reaching 170.8 billion dollars.

In the analysis, which examines the contributions of external demand conditions and market share developments to changes in exports specifically to the EU, Turkey's largest export market, using monthly foreign trade data published by Eurostat on a sectoral basis, it was stated, "The total imports of the EU have shown a downward trend since the beginning of 2023. The monthly average import, which was 252 billion euros in January 2023, decreased to 201 billion euros in August 2024. Despite the unfavorable demand conditions in the EU market, Turkey's exports to the EU increased from an average of 8.7 billion dollars to 8.9 billion dollars during the same period."

TURKEY'S EXPORTS REACHED HISTORICAL PEAK

The analysis indicates that recent developments in Turkey's exports to the EU signify a meaningful development in terms of market share, stating, "Based on the January-August periods, Turkey's share in EU imports has increased in recent years, reaching a historical peak of 4.1% in 2024."

The analysis emphasizes that the concentration of export growth in a specific sector can pose a risk in terms of sustainability, and therefore, identifying the sectoral distribution of export growth and market share gains is important for understanding export dynamics and predicting future export performance.

TURKEY'S SHARE IN THE EU MARKET IS INCREASING

The analysis explains that while the change in total EU imports has a negative contribution to Turkey's export changes in almost all sectors, most sectors have increased their market share in the EU, resulting in export growth.

This situation indicates that Turkey's competitiveness in the EU market has increased. The analysis includes the following evaluations: For example, in the motor vehicle manufacturing sector, which has the highest share of approximately 21% in Turkey's exports to the EU, the demand-based decline in EU imports has caused a decrease of 630 million euros in the sector's exports in the first 8 months of 2024 compared to the same period in 2023. On the other hand, during the same period, market share gains contributed 793 million euros to exports, resulting in an overall increase of 163 million euros in the sector's total exports. The highest contribution of market share gains to exports was in the basic metal industry, amounting to 976 million euros. Overall, while the decline in EU imports led to a weakening of 2.4 billion euros in exports, market share gains contributed 3.5 billion euros to exports, resulting in a total increase of 1.1 billion euros in manufacturing exports.

MOTOR VEHICLES WITH "MADE IN TURKEY" LABEL

The analysis notes that in the motor vehicle manufacturing sector, which has the highest share in Turkey's exports to the EU, despite the negative impact of a 4.7 percentage point decline in EU demand, market share gains contributed 5.9 percentage points to export growth, resulting in an overall increase of 1.2% in total exports.

It was pointed out in the analysis that, proportionally, market share gains in the petroleum products and other transportation vehicles sectors have significantly contributed to exports. It was also reported that despite the declining import demand, exports in the basic metal industry, chemical products, electrical equipment, non-metallic mineral products, and computer and electronic products manufacturing sectors have increased due to market share gains.

TURKISH PRODUCTS HAVE COME TO THE FORE IN MANY SECTORS

The analysis states that weak demand conditions have affected the decline in exports in the clothing, machinery equipment, fabricated metal products, textile, and leather products sectors, and concludes, "In summary, our findings show that Turkey has significantly increased its share in the EU market recently, and this increase has spread across many sectors. We evaluate that with the expected increase in the EU's import demand in the upcoming period, alongside market share gains, the rise in external demand will also support our exports."