Current account shortfall narrows to $548 million

ANKARA-Anadolu Agency

Turkey’s current account balance posted $548 million deficit this June, the nation’s Central Bank said on Aug. 9.

The bank’s latest balance of payments figures revealed that Turkey’s current account gap in June fell by nearly 82 percent year-on-year, improving from around $3 billion deficit in the same month last year.

Turkey’s 12-month rolling surplus totaled $538 million, according to data from the Central Bank.

Treasury and Finance Minister Berat Albayrak welcomed the latest data, saying that the 12-month cumulative current account balance posted a surplus for the first time under the 17-year rule of the Justice and Development Party (AKP) government.

“Despite all the currency attacks, we have managed to carry forward the rebalancing process beyond our goals. We are out of the turbulence. We removed the bubble in import and increased exports,” Albayrak wrote on Twitter on Aug. 9.

“We aim to make the current account balance permanent by completing a transformation for an economy based on exports and value-added production. We will take all necessary steps to ensure a healthy and sustainable growth and bring our economy to desired levels,” he said.

Foreign trade improves

An Anadolu Agency survey on Aug. 7 showed that economists had forecast a deficit of $376 million for June.

Expectations of a group of 17 economists ranged from a $150 million deficit to a $792 million deficit for the sixth month of 2019.

The survey also showed the end-2019 current account balance is expected to show a deficit of $7.1 billion, with estimates ranging from $2 billion surplus to $11.5 billion deficit.

“This development in the current account is mainly attributable to $1.82 billion decrease in the goods deficit recording net outflow of $2.60 billion, as well as $754 million increase in services surplus to $3.16 billion,” the Central Bank said.

It noted that gold and energy excluded current account indicated $2.28 billion surplus, in an increase of $1.69 billion compared to a year ago.

Travel item under services recorded a net inflow of $2.52 billion in June, increasing $646 million on a yearly basis, the Central Bank said.

Investment income under primary income item indicated a net outflow of $1.06 billion increasing by $102 million compared to the same month last year, it added.

Last year, the current account balance posted a deficit of around $27.6 billion, improving from a nearly $47.5 billion deficit in 2017.

The figure was the lowest since 2009, while Turkey’s highest annual current account deficit over the last decade was seen in 2011, with $74.4 billion.

The country’s new economic program, announced in September, is targeting a current-account-deficit-to-GDP ratio of 4.7 percent in 2018, 3.3% this year, 2.7 percent in 2020, and 2.6 percent in 2021.