Inflation Hit Exporters!

Recent economic developments in Türkiye and the world have deeply affected everyone, from citizens to exporters.

Güven Karaca, Chairman of the Board of Istanbul Leather and Leather Products Exporters Association (IDMIB); He shared the sector's first quarter performance, future targets, problems experienced in the sector and solution suggestions.

Güven Karaca stated that there was a 2023 percent decrease in the exports of the leather and leather products sector in 2022 compared to 9,5 and amounted to 1,8 billion dollars; He pointed out that there was a decrease of up to 2024 percent in the first quarter of 30 compared to the same period last year.

In this decline; Stating that the economic conditions in Turkey, the recession in the world and the war process in some countries are effective, Güven Karaca said, “Recent periods in Turkey have been filled with election processes. In addition, the fight against high inflation continues. Exchange rates have been at similar levels for a long time. These levels reduce the competitive chance of Turkish exporters. Our TL costs are gradually increasing. In particular, our labor and energy costs began to remain high compared to competing countries. Interest rates are also rising day by day. "It is becoming increasingly difficult to trade and invest in a high interest rate environment." said.

EXPORTS ARE DECREASING IN SECTORS THAT ARE EMPLOYMENT FACTORIES

Reminding that Turkey's exports closed 2023 with an increase, Güven Karaca said, “In 2023, we organized 3 different trade delegations in 5 continents with the support of the Ministry of Commerce. Our exporters held nearly 1000 bilateral business meetings in these delegations. The increase in our total exports was very limited. However, looking at exports in total causes us to make a wrong assessment. Are exports increasing? Yes, it increased by 0,5 percent at the end of the year. When looked at sectorally, it increased in 13 sectors and decreased in 13 sectors. When we look at the decreasing sectors; Sectors such as ready-made clothing, leather and leather products, textiles and raw materials. The ones that increase are sectors such as jewellery, olive oil, machinery-equipment, aviation and food. Therefore, we cannot say that 'Exports went well as of the end of the year'. Because, when we look at it from the other side, exports of 13 sectors are good and 13 sectors are very bad. It is necessary to take precautions against this. Because the sectors whose exports are decreasing are our country's employment factories. We are also losing human resources working in sectors whose exports are decreasing day by day. We need to see this regression. In the last 2 years, the loss in our sector alone is around 1 billion dollars. "Although, as a sector, we think that the 3 percent export loss in the first 30 months will recover in the second half of the year and in the last quarter, we think that we will close 2024 with a 15-20 percent decrease." he said.