Turkey: Current account deficit widens in November
January 12, 2018
The current account balance recorded a USD 4.2 billion deficit in November, above market expectations of USD 4.0 billion, and a sizeable increase from the USD 2.2 billion shortfall recorded in November 2016. It also surpassed the USD 3.8 billion deficit posted in October. The 12-month trailing current account deficit, meanwhile, increased from USD 41.8 billion in October to USD 43.8 billion in November.
The worsening of the current account position in November was largely fueled by a wider shortfall in the trade balance compared to the previous year. Import growth remained buoyant on the back of robust domestic demand, rising 19.8% in year-on-year terms in November, down from 20.5% in October. This surpassed growth in exports, which came in at 12.3% from the previous year in November (October: +14.9% year-on-year), supported by stronger demand from Europe and the depreciation of the lira. As a result, the trade gap of goods was USD 4.7 billion in November, below the USD 5.6 billion deficit recorded the month before but significantly surpassing the USD 2.9 shortfall logged in November 2016.
Meanwhile, trade in the service sector continued to show rising surpluses. The November reading was USD 1.3 billion, a healthy increase from the USD 0.9 billion surplus recorded in the same month of the previous year. Most of this surge can be accounted for by travel service exports, which increased to USD 1,200 million in November from USD 878 million in October.
Author: Joffrey Simonet, Economist