Current account deficit sinks by 36 pct in March

Current account deficit sinks by 36 pct in March

ISTANBUL - Hürriyet Daily News
Current account deficit sinks by 36 pct in March

One of Turkish economy’s soft belly, current account deficit falls in the first quarter. The improvement in the deficit is continuing despite high energy costs, an analyst says. DAILY NEWS photo, Emrah GÜREL

The Turkish Central Bank announced on May 11 that Turkey’s current account deficit for March was $6.1 billion, a number currently in line with the market’s $6 billion consensus and 35.9 percent lower than what was seen in March 2011.

With this data Turkey’s current account deficit is registered at $16.18 billion dollars for the first quarter of 2012. The country’s current account deficit is at its lowest point in nine months and $5.4 billion less than the first quarter of 2011.

On a year over year basis, Turkey’s current account deficit narrowed to $71.8 billion in March from $75.2 billion in February 2012. Net errors and omissions for March witnessed a $2.2 billion unaccounted for inflow bringing total unregistered inflows to $3.8 billion for the first quarter.

Economy Minister Zafer Çağlayan responded to the data by saying that Turkey’s new incentive system would improve Turkey’s current account deficit even more by narrowing the foreign trade deficit and encourage foreign direct investment. He added that in March, there was $2.8 billion in FDI into Turkey and the majority of it was from Europe.

After the figures were announced, Turkey’s Finance Minister Mehmet Şimşek said that Turkey’s current account deficit was improving despite the eurozone economic crisis and high petrol prices.

“In October 2011, Turkey’s current account deficit was $78.6 billion, but now for March it had narrowed to $71.8 billion,” said Şimşek.

Turkey’s foreign trade deficit narrowed by $3.9 million, and settled at $16.6 billion.

ING Chief Economist Sengül Dağdeviren in her report to investors said that the current account figure was not a surprise.

“Except for the energy component, the improvement in the current account deficit is continuing….short term portfolio inflows are looking especially strong. In the coming period we need to keep an eye on foreign financing,” she said.