TCMB Analysis: Strong Exports Offset Energy Costs, Supporting Türkiye’s Trade Balance

ANKARA – The Central Bank of the Republic of Türkiye (TCMB) has published a new economic analysis evaluating the impact of recent geopolitical developments on the country’s external trade performance.

Prepared by Senior Economist Yasemin Barlas and Principal Economist Şebnem Oğuz, the report concludes that Türkiye’s foreign trade balance strengthened during the second quarter of 2026, even though geopolitical tensions significantly increased energy import costs.

Energy prices climbed sharply

According to the analysis, the conflict involving the United States, Israel, and Iran triggered immediate pressure on global energy markets.

Average Brent crude prices during the second quarter rose 55.2% year-over-year, while natural gas prices increased 28.2%. As a result, Türkiye’s calendar-adjusted energy imports expanded by 32.4% compared with the same period last year.

The Bank notes that although global energy prices have recently begun to stabilize, existing supply contracts and delayed pricing effects mean that short-term risks to energy imports have not disappeared completely.

Export momentum exceeded expectations

While rising energy costs were expected to weaken Türkiye’s external balance, export activity remained considerably stronger than anticipated.

Following a temporary decline in shipments to Middle Eastern markets after the outbreak of the conflict, exports to the region recovered during the second quarter. At the same time, increasing demand from European customers provided additional support for overall export growth.

The report attributes this trend largely to disruptions in international supply chains. Uncertainty surrounding the Strait of Hormuz, together with longer delivery times and higher freight and insurance costs, encouraged many overseas buyers to source products from Türkiye instead.

Defense industry played a larger role

The analysis also emphasizes the growing contribution of Türkiye’s defense sector to export performance.

Years of investment in production capacity and advanced technologies have increased the industry’s competitiveness in global markets. As a result, defense products now account for approximately 4% of Türkiye’s total exports, representing an increase of about 2.3 percentage points over the past four years.

Heightened international security concerns have further boosted global demand for Turkish defense products.

Weak domestic demand reduced imports

Another factor supporting the trade balance was the composition of imports.

The report states that nearly all import growth during the second quarter was driven by energy purchases, while imports excluding energy declined.

Lower imports of investment and consumer goods reflected subdued domestic demand, consistent with tighter monetary policy. High-frequency indicators, including credit card spending and manufacturing surveys, point to slower domestic consumption while export expectations continued to improve.

Current account outlook improving

The Central Bank concludes that stronger exports successfully compensated for much of the pressure created by higher energy prices.

Combined with moderating energy costs and softer domestic demand, these developments have reduced the upside risks facing Türkiye’s current account deficit compared with previous months.

The report suggests that if geopolitical tensions continue to ease and energy markets remain stable, the country’s external balance could improve further in the coming quarters.

Kaynak: Central Bank of the Republic of Türkiye (TCMB) – Blog Analysis, July 6, 2026