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Turkey’s Service Export

The service sector has a significant role in the economies of both developed and developing countries. The service sector contributes to the national economy and provides foreign currency inflow and employment. The share of the service sector in the national income of Turkey has always been high. The contribution of service exports to the economy is great, as it is in the service sector. Service exports contribute to closing the current account deficit thanks to the foreign currency input it provides.

For more detailed information about service exports, you can review our blog article “Service Export in Turkey

In this article, we are going to analyze the data of Turkey’s Service Export by years in detail. In this article, you can find the export value by years of the sectors in the service exports and their distribution.


In the table above, you can see the dollar-denominated figures of service export and service import between 2007-2018 in foreign currency.

Based on the data of the International Trade Center (ITC) and Turkstat, in 2018, Turkey's service sector has increased by 11 percent to the level of 48.8 billion US dollars when compared to the previous year. While having an export surplus of 20 billion US dollars in the service sector in 2017, with an increase of 27 percent in 2018 Turkey had a 25.4 billion US dollar trade surplus and has contributed substantially to the national economy.

 

We can examine the service export, import and foreign trade balance from 2007 to 2018 in detail in the graphic below.


We see a steady increase in service exports, especially between 2009 and 2014. Service exports, which were 36 billion dollars in 2009, reached 52 billion dollars in 2014. However, there was a decrease in service exports in 2015 and 2016. The value of service exports in Turkey was 47 billion dollars in 2015 and 38 billion dollars in 2016.

 

This decline in service exports was not only in service exports or not only for Turkey. At the same time, there was a decrease in world trade in global markets between 2015 and 2016. The fluctuation between currency units has also an effect on that decrease. Euro, Sterling, Yen decreased in value against the dollar in 2015 and 2016, and the dollar equivalent of the export value of the countries in their currency has also decreased. The fall in oil prices and the political crises in the Middle East caused OPEC to reduce exports of goods and services they demand from Turkey. At the same time, due to the political events occurred in the relations of Russia-Ukraine and Turkey-Russia, there has been a decline in the demand for goods and services.

We see that there has been a steady increase in service exports in parallel with the exports of goods after 2016. 

You can find the data that we examine the sub-categories of service exports arranged by years in the table below.


When we examine service exports based on sub-categories, the Travel and Tourism sector takes first place in 2018 with an export value of 25 billion dollars. The Transportation sector is in second place, with an export value of $ 17.5 billion.

We can see the distribution of the exports of the Travel and Tourism sector for personal and business purposes and export values ​​in the table below. In 2018, the Travel and Tourism sector had a total value of 25 billion dollars; 22 billion dollars of which constitutes travel and tourism expenditures for personal purposes, and about 3 billion dollars of which are business and tourism expenditures for business purposes.

 

Another important sector that stands out in the service sector is the Transportation sector, which ranks second. The transportation sector reached a total export volume of 17 billion dollars in 2018. In the table below you can find the details of the transportation sector export.


A large part of Turkey's Transport sector exports consists of Air Transport. In 2018, the total export value of Air Transportation was 13.7 billion dollars. At the same time, approximately 12 billion dollars of Transportation Service exports which were 17.6 billion dollars in total in 2018, were realized in passenger transportation, while 3 billion dollars of which were in cargo transportation.

 

Source: International Trade Center (ITC), TurkStat, Turkish Exporters’ Association

Assistant Professor İbrahim HÜSEYNİ,


Why Foreign Exchange Increases in Turkey Do Not Affect Exports? Batman University Journal of Life Sciences, Volume 7, 1/1 (2017)

https://dergipark.org.tr/tr/download/article-file/313224

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