As the World Slows Down, Turkish Arms Exports Surge, Erdogan Reaps Strategic Rewards

Turkey’s foreign trade deficit has narrowed by 15.7 per cent to $42.7 billion. Amidst the volatility of Middle Eastern conflicts and a global trade slowdown, Ankara has found an opportunity to alleviate one of its most significant economic challenges.

This figure emerged even as Turkish exports weakened. In May 2026, the country’s export value fell by 9.3 per cent to $22.5 billion compared to the same period the previous year. However, why did the deficit actually shrink? The answer lies in imports. Data from the Turkish Ministry of Trade shows that imports fell more deeply than exports. In May, imports plummeted by 10.7 per cent to $28.1 billion.

When goods entering the country shrink faster than goods sold abroad, pressure on the trade balance is reduced. But what caused Turkey’s imports to suddenly slow down? Turkish Trade Minister Omer Bolat revealed that the largest declines occurred in gold imports and the automotive sector. At the same time, oil imports increased by almost $2.5 billion, while natural gas imports remained relatively unchanged. Does this indicate a shift in Turkey’s economic strategy?

While monthly trade has declined, one fact remains noteworthy. From January to May 2026, Turkish exports still grew slightly by 0.3 per cent to $111.2 billion, while imports rose by 1.2 per cent to nearly $154 billion. These figures suggest that Turkey’s export engine has not yet lost its momentum. But which sector is supporting this?

It is not textiles, nor is it agricultural products. Bolat noted that medium-to-high and high-technology products now account for 44 per cent of Turkey’s total exports. This shift indicates that the Turkish economy is moving away from traditional commodities towards higher value-added products. As for the largest buyers of these goods, the answer remains the same: Europe. The European Union remains Turkey’s largest export market, with shipments reaching $48.6 billion, or approximately 43 per cent of total national exports.

Germany remains the primary destination, followed by the United States, the United Kingdom, Italy, France, and Iraq. This dependence on European markets means that any economic changes in the region are decisive for the future of Turkish exports. However, other threats are emerging from the south. The US-Israel-Iran conflict has begun to leave its mark on Turkish trade. Exports to Gulf countries recently plummeted by up to 30 per cent month-on-month due to geopolitical tensions in the region. Although shipments began to recover in April and May, regional volatility remains a constant shadow over Turkish businesses.