Current Account in Turkey
Turkey - Current Account
Current account falls back into deficit in November
The current account balance of Turkey swung from a USD 1.0 billion surplus in November 2018 to a USD 0.5 billion deficit in November (October: USD +1.6 billion), which marked the first result in the red in five months. On a 12-month rolling basis, meanwhile, the current account surplus narrowed from USD 4.3 billion in October to USD 2.7 billion, marking the second consecutive month in which the rolling surplus narrowed.
The deficit in November came on the back of a greater merchandise trade deficit and a smaller services trade surplus amid a strong moderation in services exports. The increased shortfall in merchandise trade came chiefly on the back of a resurgence in imports, which grew 10.5% year-on-year (November 2018: -21.2% year-on-year). Domestic demand is seemingly slowly getting back on its feet after having been down for the count in the wake of the 2018 currency crisis. Simultaneously, export growth slowed for the third month running (November: +0.7% yoy; November 2018: +6.7% yoy) and further weighed on the trade balance.
Meanwhile on the financial front there was a strong inflow of USD 3.1 billion (October: USD -0.1 billion), driven by reduced acquisition of foreign assets by Turks, robust foreign direct investment, foreign inflows of currency deposits at local banks, foreign debt issued by non-financial firms and the government’s bond issuance.
Looking ahead, while the current account is expected to have recorded a small surplus last year, it is widely expected to return to deficit this year and thereafter owing to resurrecting domestic demand lifting import growth and thereby widening the trade deficit.
FocusEconomics Consensus Forecast panelists expect Turkey to record a current account deficit of 1.4% of GDP in 2020. The year after, the panel sees the current account deficit widening to 2.2% of GDP.
Turkey - Current Account Data
|Current Account (% of GDP)||-6.7||-4.7||-3.7||-3.8||-5.6|
5 years of economic forecasts for more than 30 economic indicators.
Turkey Current Account Chart
Source: Central Bank and FocusEconomics calculations.
|Bond Yield||12.00||-0.09 %||Dec 31|
|Exchange Rate||5.95||-0.85 %||Jan 01|
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January 16, 2020
At its 16 January Monetary Policy Committee (MPC), Turkey’s Central Bank slashed its one-week repo rate again, this time by 75 basis points to 11.25%.
January 14, 2020
Industrial production grew a calendar-adjusted 5.1% year-on-year in November, up from October’s revised 3.9% expansion (previously reported: +3.8% year-on-year).
January 13, 2020
The current account balance of Turkey swung from a USD 1.0 billion surplus in November 2018 to a USD 0.5 billion deficit in November (October: USD +1.6 billion), which marked the first result in the red in five months.
January 3, 2020
Consumer prices in Turkey rose 0.74% month-on-month in December, notably above the 0.38% monthly price increase recorded in November.
January 2, 2020
Turkish manufacturing-sector business conditions deteriorated at the same pace in December compared to November, with the Istanbul Chamber of Industry Purchasing Managers’ Index (PMI) remaining at 49.5 in December.