Turkey’s current account deficit fell by 16% y/y to $4.2bn in December, just a touch below the market consensus forecast for a figure of $4.3bn.
The current account shortfall, the economy’s Achilles’ heel, was thus $32.6bn last year versus $32.1bn in 2015, data from the central bank showed on February 14.
The government’s current account deficit forecast for 2017 is $32bn or 4.2% of GDP.
In December, exports increased by 10% y/y to $13.5bn, while imports were up 2% y/y to $17.7bn, leading to a foreign trade gap of $4.2bn. That represents a 17% decline compared with the same month of 2015.
Tourism revenues, an important source of hard currency, rose by 1% y/y to $700mn in December, but full-year tourism revenues declined to $13.7bn from $21.3bn in 2015.
Net FDI inflows fell by 1% y/y in December to $1.54bn. In 2016, net FDI stood at $9bn, down from $12.45bn in 2015. Foreign investment inflows financed 28% of the country’s current account shortfall last year.
The central bank also reported a net portfolio inflow of $1.91bn in the month, a 95% y/y increase. There was an inflow of $118mn into the country’s equity market in December. Last year, inflows into Turkish equities amounted to $823mn vs an outflow of $2.4bn in 2015.
The domestic government debt securities market saw an outflow of $414mn in December, but inflows into the market were $823mn in 2016 overall against an outflow of $7.7bn in the previous year.
Data also showed an inflow of $1.96bn through net errors and omissions. Unregistered capital inflows that reached $11.1bn last year helped the country finance its large current account shortfall.
|Turkey's Balance of Payments|
|Goods, Services and Primary Income||-33,548||-34,359||2%|
|Goods and Services||-23,906||-25,350||6%|
|Foreign trade balance||-48,114||-40,746||-15%|
|Net acquisition of financial assets||5,095||3,118||-39%|
|Net incurrence of liabilities||17,550||12,116||-31%|
|Net Portfolio Investment||15,719||-6,404||-|
|Net acquisition of financial assets||6,129||1,447||-76%|
|Net incurrence of liabilities||-9,590||7,851||-|
|NET ERRORS AND OMISSIONS||10,198||11,069||9%|