Turkey’s current account deficit narrows 55% y/y in May.

By bne IntelliNews July 11, 2014

The current account (CA) deficit narrowed 54.9% y/y to USD 3.4bn in May, lower than the market consensus of USD 4.08bn, as the country’s foreign trade deficit shrank 34.5% y/y to USD 5.26bn in the month, data from the Central Bank showed on Friday. The Turkish economy ran a current account deficit of USD 19.84bn in January-May, down from the deficit of USD 32.3bn a year ago.

Turkey’s CA deficit has been declining steadily since the beginning of the year; it fell 14% y/y in January, 35% y/y in February, 42% y/y in March and dropped 41% y/y in April.

Exports rose 3.8% y/y to USD 14.9bn but imports fell at a higher rate of 9.9% y/y to USD 20.25bn in the month. The pace of export growth slowed in May from 8% y/y in April and 13% y/y in March. Even though Turkey seems to have benefited from the recovery in Europe, the country’s largest export market, the ongoing turmoil in Iraq is having an impact. Exports to Iraq dropped 21% y/y in June, according to data from the Turkish Exporters’ Assembly (TIM).

On the financing side, FDI inflows into the country amounted to USD 577mn, financing 16.8% of the CA deficit in the month while tourism revenues increased to USD 2.28bn in May from USD 1.4bn in April, also rising 1.4% y/y. The Central Bank reported USD 5.7bn worth of FDI inflows in the first five months of the year, higher than USD 4.55bn of FDI inflows a year ago. Tourism revenues amounted to USD 6.46bn in January-May, up from USD 6.36bn in the same period of 2013. Portfolio inflows rose 55.5% y/y to USD 1.4bn in May but fell 67% m/m. In the first five months of the year, portfolio inflows amounted to USD 3.1bn, representing an 83% y/y decline.

There was an inflow of USD 624mn into the Turkish equities market in May, up from the previous month’s USD 579mn. Inflows into Turkish government debt securities amounted to USD 336mn in May, down from USD 467mn in the previous month. Non-residents realised net sales of USD 3.07bn in five months in government debt securities, in contrast to net purchases of USD 7.3bn a year ago, the Central Bank said.

Banks borrowed USD 895mn on net basis in May through bond issues in international capital markets, bringing the net borrowings in the five-month period to USD 3.09bn. The Central Bank also reported an inflow of USD 984mn through net error and omission in May. Inflows through net error and omission amounted to USD 6.71bn in the first five months of the year against the outflow of USD 2.86bn in the same period of 2013.

Related Articles

Turkey postpones plan to sell firms seized after coup attempt

Turkey has put on hold its plan to sell almost 600 companies worth about $10bn seized in the aftermath of the failed military coup, people familiar with the matter told Bloomberg on March 23. The ... more

Turkey to maintain EU economic relations but review political ties, says Erdogan

Turkey will maintain its commercial ties with the European Union but will review its political and administrative ties with the bloc after the April 16 referendum, Turkish President Recep Tayyip ... more

Turkey easily tops table for Twitter content removal requests

Turkey accounted for more than half of all content removal requests received worldwide by Twitter during the second half of 2016, according to the social media company’s ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss