Turkey’s February current account deficit widens 29% y/y to $2.53bn

Turkey’s February current account deficit widens 29% y/y to $2.53bn
By bne IntelliNews April 11, 2017

Turkey’s current account deficit expanded by 29% y/y to $2.53bn in February, the central bank announced on April 11. This corresponded with the market's expectation.

The current account deficit, a weak spot when it comes to the Turkish economy, stood at $32.6bn in 2016, compared to the previous year’s $32.1bn. The government’s forecast for 2017 is $32bn, or 4.2% of GDP.

Exports declined by 2% y/y to $12.7bn while imports were up 2% y/y to $15.2bn, leading to a foreign trade deficit of $2.27bn in the second month of 2017, a 28% y/y rise from a year earlier.

Tourism revenues, which traditionally help the country plug its large current account deficit, were down 12% y/y to $863mn, financing 34% of the current account shortfall in February.

On the financing side, net foreign direct investment (FDI) inflows dropped 5% y/y to $457mn, while net portfolio inflows declined by a sharper 67% y/y to $409mn in February. There was an inflow of $331mn into Turkish equities in the month while the domestic government debt securities market saw an inflow of $179mn. The central bank also reported an outflow of $84mn through net errors and omissions.

Following the release of the latest data, the Turkish lira was trading at 3.7258 per dollar, down 0.10% d/d. The main stock exchange index, the BIST-100, was down 0.31% to 90,958.

Turkey's Balance of Payments
($ mn) 2015 2016 y/y Jan-Feb/16 Jan-Feb/17 y/y
CURRENT ACCOUNT -32,118 -32,626 2% -4,166 -5,287 27%
Goods, Services and Primary Income -33,548 -34,415 3% -4,665 -5,605 20%
Goods and Services -23,906 -25,424 6% -3,503 -4,497 28%
Foreign trade balance -48,114 -40,843 -15% -4,632 -5,614 21%
Exports 151,970 150,178 -1% 23,009 24,576 7%
Imports 200,084 191,021 -5% 27,641 30,190 9%
CAPITAL ACCOUNT -21 23 - 15 -16 -
FINANCIAL ACCOUNT -21,941 -21,335 -3% -2,918 -6,125 110%
Net FDI -12,455 -9,148 -27% -1,063 -631 -41%
Net acquisition of financial assets 5,095 3,155 -38% 548 428 -22%
Net incurrence of liabilities 17,550 12,303 -30% 1,611 1,059 -34%
Net Portfolio Investment 15,719 -6,292 - -70 -2,482 3446%
Net acquisition of financial assets 6,129 1,511 -75% 384 -474 -
Net incurrence of liabilities -9,590 7,803 - 454 2,008 342%
Net errors and omissions 10,198 11,268 10% 1,233 -822 -
Source: tcmb

Data

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