Turkey Lowers Deficit by Selling Iran Gold

Posted on September 9, 2012


06/09/2012 07:33
Iran has become Turkey’s largest export market for gold, according to a Turkish statistics agency. A report revealed that Iran purchased an astounding 86 percent of Turkey’s gold exports, amounting to $6.2 billion. This accounted for 70 percent of Turkey’s total increase in exports this year.

Gold exports between January and July 31 were five times higher than they were in all of 2011, thanks to the enormous demand in Iran.
In 2010, Iran accounted for only 4 percent of Turkey’s gold sales.

Overall in the first seven months of 2012, Turkey sold more goods to Iran than to any other country. Exports quadrupled to $8 billion annually, and Turkey imported $7.7 billion worth of oil, gas, and other goods during the same time period. It has even been reported that Iran asked Turkey to pay for oil and gas in gold rather than in any currency.

The gold trade provided a significant boost to Turkey’s economy, which has suffered due to a decrease in European trade. Instead, Turkey looked east and began selling more precious metals to the Middle East and Southeast Asia, as well as other goods.

In July, Turkey’s foreign deficit fell 14.3 percent from the same time period one year prior, to $7.89 billion. However, the economy still struggles due to the economic crisis in Europe, which buys most of its exports, and a spillover of violence and refugees from neighboring Syria.

According to Economy Minister Zafer Çağlayan, exports rose 8.5 percent while imports declined 1.5 percent in the first 7 months of 2012, compared to the same time period one year prior.

Çağlayan said that Turkey increased its exports “despite a ring of fire”. He added that exports should reach $148.5 billion by the end of 2012, compared with the record high of $135 billion at the end of 2011.

Despite the good signs, the EU crisis has had an effect on Turkey. In July, the EU’s share of exports fell to 34 percent of the total, at $33.8 billion, compared to 48 percent in July 2011. On the other hand, exports to Iran nearly tripled and exports to Libya are up 181 percent.

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