Turkey’s current account deficit, known as the “soft spot” of the Turkish economy, has been under recovery over the past few years. The data in May exceeded expectations slightly with the deficit widening to $3.99 billion, after narrowing to $3.4 billion in April.
According to the Turkish Central Bank, during the January-May period the current account deficit narrowed to $18.55 billion, 9 percent lower than the previous year’s $20.4 billion.
The Central Bank stated that the improvement in the deficit from last year was limited by direct investment outflows involving distributed profits, which increased by $219 million to $407 million compared to the same month of previous year.
Meanwhile, as imports rose faster than exports Turkey’s annualised current account deficit widened to $44.6 billion in May, about 5.6 percent of the country’s gross domestic product (GDP), from $44.3 billion in April.
Exports fell 18.3 percent in May year on year to $11.9 billion, while imports declined 13.9 percent to $17.3 billion during the same period.
Once the data was announced, the Turkish lira rose slightly against the dollar, trading at 2.6649 to the dollar.
By the end of 2015 Turkey’s current account deficit is expected to reach $46 billion, or 5.4 percent of its GDP.