Turkey’s current account deficit exceeds expectations

Turkey’s current account deficit widens in March to $4.96 billion, the highest deficit of this year

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Turkey’s current account deficit, known as the “soft spot” of Turkey’s, economy has been falling for several years, however, the highest figure of 2015 was recorded in March. 

As exports recorded their biggest drop since 2009 in March, the current account deficit grew to $4.96 billion, taking the 12-month rolling deficit to $45.49 million. According to Turkish Central Bank data, exports fell 16.2 percent from last year to $13.2 billion, while imports declined 5.5 percent to $18.1 billion. 

The lira trimmed initial losses seen after the current-account gap report was published and was little changed, settling at 2.6944 per dollar at 10:43 a.m. in Istanbul. 

Since Turkey is largely dependent on energy imports, declining oil prices have had a positive effect on Turkey’s current account deficit. In 2014, Turkey’s balance of payments fell to $45.8 billion, a decrease of $18.82 million compared to 2013, taking the figure to the lowest level of four years. 

However, oil prices have reached 2015 highs last week. On Wednesday, Brent crude reached $69.59 per barrel, but the rally did not last for long and prices fell 6.5 percent to $65 a barrel. 

Deputy Prime Minister Ali Babacan said last week that the future price of oil will determine Turkey’s current account deficit and inflation outlook for this year. 

Turkey’s current account deficit is expected to reach $37 billion by the end of this year.

TRTWorld and agencies