Turkey’s current account deficit has widened by $4.4 billion, year-on-year, to reach nearly $7.1 billion in January, the Turkish Central Bank said on March 12.
The gap was slightly higher than estimates, which were set at around $6.9 billion.
According to the bank’s report on balance of payments, the country’s 12-month rolling deficit stood at nearly $51.6 billion in January.
“This development in the current account is mainly attributable to a $4.5 billion increase in the goods deficit, recorded as a net outflow of $7.63 billion, as well as an $82 million increase in the primary income deficit to $479 million,” the bank said.
Travel, a major “services” item, recorded a net inflow of $822 million, an increase of $127 million compared with the same month of the previous year, the bank added.
Turkey’s lira slid against the dollar and euro after the current account deficit more than doubled in January, increasing concern about the government’s economic policies.
The lira dropped 0.7 percent to 3.84 to the dollar at 4:31 p.m. in Istanbul. The currency declined 0.6 percent to 4.72 per euro.
According to QNB Finansbank note due to the data released today “Looking ahead, the preliminary trade data indicate further widening in the trade deficit in February, which will translate into higher CA deficit. We expect the widening trend in the external deficits to keep on in the first half of 2018 due to rising energy costs and strong domestic demand while gold flows will remain as a source of uncertainty. Assuming that GDP growth will decelerate towards 5% from around 7% in 2017 and gold imports will moderate, we anticipate some rebalancing in the second half. Nonetheless, the recent trends suggest higher current account deficit than our forecast of USD52 bn for 2018. Thus, we revise our forecast to USD 56 bn, which will make about 6.4% of 2018 GDP.”
Turkey’s current account gap in January 2017 was almost $2.7 billion with a 12-month rolling deficit of $33.58 billion, according to the Turkish Central Bank’s revised data.