Turkey consolidates its role in the European fashion sourcing

Turkey consolidates its role in the European fashion sourcing while its economy weakens. The county, which has entered a technical recession, showed an increase in exports of textile and fashion goods to Europe, relying mainly on the devaluation of the local currency.

 Turkey’s Gross Domestic Product (GDP) registered a 2.4% fall in the fourth quarter of 2018 compared to the previous quarter, entering technical recession for the first time since 2009, according to data published  by the Turkish Statistical Institute (Turkstat). In Inter-on-year terms, the country’s GDP recorded a 3% drop.

Despite the setbacks of the Turkish economy in the last two quarters of the year, 2018 as a whole had a positive performance, with an annual increase of 2.6% compared to 2017. However, the rise was well below that registered one year ago, when it stood at 7.4%.

The Turkish Minister of Finance and Treasury, Berat Albayrak, stressed that this is temporary nature of the economic slowdown and explained that the country has started a moderate recovery driven by exports and tourism income.

It is important to note that part of this recovery is based on the devaluation of the local currency executed last year on several occasions by the Turkish Government in order to gain competitiveness in foreign markets.

The textile sector, highly sensitive to production costs, took advantage of such devaluation to increase exports.

In 2018, the European Union imports increased by 2%, which establishes itself as the third largest hub in the European sector, according to the latest data revealed by ICEX.

Turkey was the only proximity sourcing destination of the European Union which increased its sales to the region last year, whereas Italy fell by 2.2%, in the Czech Republic had a drop by 5.6% in and Portugal plummeted by 10.2%.

 

 
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