Turkey's current account sees $1.2B surplus in July

Turkey's current account sees $1.2B surplus in July

Turkeys current account sees $1.2B surplus in July

Turkey’s current account balance posted a $1.2 billion surplus this July, improving from a $2.2 billion deficit in July 2018, the country’s Central Bank announced on Sept. 13.

The country’s 12-month rolling surplus totaled $4.4 billion, according to Central Bank data.

“This development in the current account is mainly attributable to a $2.4 billion decrease in the goods item recording net outflow of $2.5 billion, as well as a $959 million increase in services inflow to $4.3 billion,” the bank said.

 Economists polled by Anadolu Agency had projected the Turkish economy would run a current account surplus of $1.1 billion in July.

A group of 14 economists’ estimates for the month ranged between surpluses of $160 million and $1.5 billion.

The bank data showed the gold and energy-excluded current account surplus stood at $4.6 billion, up $2.4 billion from the same month last year.

Net inflows from travel items under services surged $637 million to nearly $4 billion during the same period.

Direct investment recorded a net inflow of $657 million decreasing by $66 million compared to the same month of the previous year, the bank said, adding that portfolio investment recorded a net inflow of $97 million in the month.

Non-residents’ equity securities transactions and government domestic debt securities transactions recorded net purchases of $88 million and $391 million, respectively.

Regarding the bond issues in international capital markets, local banks realized net repayments of $1.4 billion and the general government realized a new issue of $2.25 billion.

Data also showed that official reserves recorded a net inflow of $3.2 billion.

Speaking on Sept. 12 ahead of the release of the current account statistics, Treasury and Finance Minister Berat Albayrak had predicted that the balance of payments would probably post the largest 12-month trailing current account surplus in the country’s history.

“These are important data, showing the progress we have made,” Albayrak said.

The minister added that he is confident the economy will post positive annual growth this year.

“In the new economic program - released in September - we underlined that 2019 would be a period of ‘rebalancing.’  We said economic growth would slow a little and then pick up to a ‘healthy and sustainable’ level.

In the new economic program, the government forecast a current account deficit of $26 billion (or 3.3 percent of GDP) this year. The deficit will decline to $23.5 (or 2.7 percent of GDP) in 2020, according to the government’s estimates.

Albayrak said that on a quarterly basis, GDP expanded at 1.6 percent and 1.2 percent which are the initial signs of the recovery in economic activity.

He also said that inflation would fall to single digits in September.

$1.1B current account surplus expected in July
$1.1B current account surplus expected in July