Exporters flock east as EU too is infected by recession

29 Jul '08

2 min read

Recession, which has been plaguing US for so long, is infecting the European Union as well. As a consequence, Turkish companies are contemplating a diversification of their industrial exports to markets like Iran, Iraq and Syria.

Rising food and oil prices have been the major reasons behind this inflationary trend in Europe. Rather than losing its market share, Turkish companies find it more profitable to opt for alternative export destination for its products.

In the wake of economic slowdown, EU is likely to follow a more selective policy while purchasing goods. For instance, products will be examined more thoroughly and new import barriers will be imposed to restrict excessive inflow of foreign goods. In order to retain its markets, Turkey will have to be careful about all of these issues.

Turkey's trade volume with the European Union reached 99.5 billion euros. While its imports from EU rose 5 percent to touch 52.6 billion euros, its exports to the bloc went up by 12 percent to 46.9 billion euros in 2007.

However, the growth rate of EU has suffered immensely in recent times and this can be evidently seen from the fact that inflation in the 27 member bloc, which was 4 percent in May, reached 4.3 percent in June this year.

Experts believe that although the effect of inflation in EU is not very perceivable at the moment, it will be felt within two or three months. It is therefore best, not to rely on one region for export earnings, especially when other regions have a lot better to offer.

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