Turkish current account returns to deficit in December

11 Feb, 2019

Economists expect Turkey to record a current account deficit of $1.5 billion in December and of $27.7 billion for 2018, as a whole, the poll showed.

Along with persistent double-digit inflation, Turkey's long history of such deficits has been a major concern for investors. It means the economy relies on speculative foreign inflows to finance the shortfall.

The lira's near-30 percent depreciation in 2018, had weakened domestic demand and driven up import costs, a major factor in the current account balance, leading to four consecutive months of surpluses.

The expected $1.5 billion current account deficit in December - the median estimate of 17 economists in the poll - compared with a $986 million surplus a month earlier.

"It does not amount to a change in the trend. We will produce a deficit due to the low tourism revenues but the current account deficit will continue to fall," said economist Haluk Burumcekci of Burumcekci Research and Consulting.

He said he expected a deficit of $22 billion in 2019, but there were downside risks to this forecast, with falling energy costs and low growth potentially having a positive impact.

Current account deficit forecasts for December ranged between $540 million and $1.8 billion. Last year in December, the current account showed a deficit of $7.7 billion.

The central bank is due to release November current account data on Feb 14 at 0700 GMT.

Copyright Reuters, 2019

Read Comments