ISTANBUL (Reuters) - Turkey will make it harder to import goods except for strategic products and those that cannot be produced domestically, Finance Minister Berat Albayrak was quoted as saying on Wednesday, after Ankara imposed additional tariffs on hundreds of products.
“Imports will not be easy,” he was quoted as saying by state-owned Anadolu news agency, adding that domestic production will be prioritised. He said Ankara will implement long-term lira financing programmes for the industry sector.
A sharp decline in exports during the coronavirus pandemic has lead to renewed concerns about Turkey’s current account, while a fall in central bank reserves, partly due to state banks selling foreign currencies to prop up the lira, have added to worries about Turkey’s ability to service external debt.
Recent moves suggest that Turkey is turning to import compression to offset the risks of external debt, as well as moves towards “soft capital controls”, said Jason Tuvey, senior emerging market economist at Capital Economics.
“These measures are deterring the foreign investment that Turkey ultimately needs to help finance its current account deficit,” he said.
Ankara on Wednesday imposed additional tariffs of up to 30% on imports of more than 800 items including work and agriculture machinery, according to a statement in the Official Gazette, a move that could limit the current account deficit.
Last week, it announced additional tariffs on dozens of goods of up to 30%.
Turkey’s trade deficit widened 13.4% year-on-year to $3.4 billion in April, with exports falling more than 40%.
The current account deficit widened sharply to $4.92 billion in March, central bank data showed, due to the larger trade deficit, lower tourism income and portfolio outflows.
Albayrak was also quoted as saying Turkey will carry out swaps in local currencies more effectively.
Reporting by Ezgi Erkoyun; Writing by Ali Kucukgocmen; Editing by Jonathan Spicer and Dominic Evans