How can Türkiye's trade deficit be reduced?

Products contributing to the trade deficit can be divided into three main categories.

These categories are:

### PRODUCTS IMPORTED DUE TO LOW PRODUCTION AND QUALITY

The first category includes products that are produced in Türkiye but are still imported for various reasons. These products are manufactured domestically, but their production volume and quality are insufficient. Consequently, this leads to increased imports and presents challenges in exporting these products due to their lack of competitiveness.

In other words, these products both increase imports and hinder exports.

### PRODUCTS IMPORTED FOR LUXURY CONSUMPTION

The second category consists of goods imported by those who desire luxury items. Reducing the import of these products can be challenging. High-income individuals' luxury consumption can only be curtailed through high taxes.

### PRODUCTS IMPORTED DUE TO INSUFFICIENT OR NON-EXISTENT DOMESTIC PRODUCTION

The third category comprises products that are either not produced in Türkiye or are produced in insufficient quantities, necessitating their import. Energy is a prime example of this category.

This group of products is the most challenging to reduce imports for and increase domestic production.

Changing this situation, which leads to increased imports and contributes to the trade deficit, is of strategic importance.

To reduce the trade deficit, it is essential to boost the production of goods that are major import items, are produced domestically but in insufficient quantity or quality, or are not produced domestically at all. This would have a positive effect on reducing both the trade deficit and the current account deficit.

In past years, the Ministry of Trade implemented the Input Supply Strategy (GİTES) and Action Plan, which has been an important strategy for reducing the trade deficit.

The Input Supply Strategy and Action Plan are crucial for driving economic growth and ensuring the sustainability of exports, which is a significant source of economic growth.

These measures will reduce the economy's dependency on imported input goods while also increasing domestic production of currently non-produced items, thereby boosting both production and exports.

The trade deficit, which is the biggest obstacle to the growth of Türkiye's economy, along with the resulting current account deficit, external liabilities, and other related issues, fundamentally depends on changing this situation for resolution.