Turkey: Current account slips back into deficit in December
February 14, 2019
The current account balance recorded a USD 1.4 billion deficit in December, contrasting November’s revised USD 1.1 billion surplus (previously reported: USD 1.0 billion surplus) but down from the USD 7.8 billion deficit recorded in the same month a year prior. December’s figure brings the deficit in 2018 as a whole to USD 27.6 billion, down from 2017’s USD 47.3 billion shortfall as limp domestic demand and the weaker lira in H2 led to a marked turnaround in the current account balance.
December’s figure was underpinned by a trade deficit in goods, while there was an ample trade surplus in services, thanks in part to stronger tourism inflows compared to the same month in the previous year.
On the financing front, there were USD 0.5 billion of net outflows in December, driven by net outflows of portfolio investment. However, thanks to net errors and omissions (capital flows of unknown origin), the Central Bank accumulated foreign reserves of USD 0.9 billion, helping to trim reserve losses for 2018 as a whole.
Author: Oliver Reynolds, Economist