Turkey's current account deficit was recorded at $2.22 billion in January, a decrease of $216 million compared to the same month last year, the country’s central bank said on Thursday.
The 12-month rolling deficit also fell to $31.9 billion.
"This development in the current account is mainly attributable to [a] $250 million decrease in the deficit in goods item recording $2.84 billion and $25 million decrease in primary income deficit recording $434 million," the bank said in its report.
"The 12-month rolling current account deficit started the year with a slight decline to $31.9 billion. The current account deficit to GDP ratio remained at 4.5 percent," economist Haluk Burumcekci said. "Decline in trade deficit in January compared to the same month of last year was again the main factor in limited improvement observed in the current account deficit."
Declining oil prices have had a significant positive effect on the current account deficit and inflation. Low oil prices were expected to help narrow Turkey's current account deficit, according to the credit agency Moody's.
“We expect the current account balance to have a deficit of $38 billion in 2016 but the risks on this forecast are on the downside,” Burumcekci said, signaling even lower deficit figures may come at the end of year.
Oil prices have fallen 65 percent since mid-2014, from $115 a barrel in June 2014 to below $30 per barrel in 2016 (now $40 per barrel) reaching their lowest level in seven years, and recording the most rapid decline since 2008.
Turkey’s energy imports declined by 31 percent in 2015 compared to previous year, according to Turkey's statistical authority (TURKSTAT). Turkey’s energy imports stood at $37.8 billion last year, decreasing by around $17 billion compared to 2014. Turkey paid a total amount of $207 billion for its imports last year, almost one-fifth of which was for energy.
Meanwhile, Turkey’s foreign trade deficit declined 13.4 percent year-on-year in January, in line with the oil plunge. In January, the deficit fell to $3.76 billion, down from $4.34 billion from same month last year, a decrease of 13.4 percent, according to data released by TURKSTAT on Feb. 29.
The exports amounted to $9.6 billion, a 22 percent decrease from January 2015, and imports were $13.4 billion, a 19.7 percent decline year-on-year.