Turkey: Current account deficit increases to four-year high in December
February 14, 2018
The current account balance recorded a USD 7.7 billion deficit in December, widening the gap from the USD 4.4 billion shortfall recorded in December 2016 and marking the largest monthly deficit since December 2013. The deficit was slightly greater than the USD 7.5 billion deficit that market analysts had expected and was well above the USD 4.4 billion shortfall logged in November. The 12-month trailing current account deficit widened from USD 43.8 billion in November to USD 47.1 billion in December, the highest since June 2014.
The widening of the current account shortfall primarily reflected a significantly larger trade deficit compared to the previous year. Growth of goods imports remained buoyant on the back of robust domestic demand, increasing to 22.1% in December from 21.4% in November on a year-on-year basis. Conversely, annual growth of goods exports decelerated sharply to 5.6% in December from 11.8% in the previous month. Due to these diverging trends, the trade deficit in goods widened to USD 7.4 billion in December, considerably greater than the USD 4.8 billion shortfall recorded In November and the USD 4.3 billion deficit logged in December 2016.
Meanwhile, the trade surplus in the services sector improved mildly from the previous year, rising to USD 675 million in December from USD 630 million in December 2016. The main contributor to December 2017’s figure was the travel services industry, recording a net inflow of USD 780 million from the USD 700 million logged in the same month of the previous year.
Author: Javier Colato, Economist