Turkey’s June current account deficit falls by 19.5% y/y

By bne IntelliNews August 11, 2015

Turkey’s June current account deficit declined by 19.5% y/y to $3.36bn, slightly higher than the market consensus forecast of $3bn, data of the central bank showed on August 11.

Foreign trade deficit was down by 23% y/y, declining to $4.8bn in the month. Imports fell by 12% y/y, but more worryingly exports exhibited a 7% y/y decline.

Net FDI inflows stood at $554mn in June, down from $861mn a year ago and $944mn in May 2015. Net FDI financed 17% of June’s current account deficit.

The central bank reported a net portfolio investment outflow of $661mn in June, after a $2.5bn of outflow in the previous months. Non-residents’ purchases of Turkish equities stood at a tiny $1mn, down from $74mn in May, while government domestic debt securities indicated a net sale of $452mn.

The bank also said there was outflow of $1.44bn under the “net error & omissions” item in June vs an inflow of $2bn in the previous month

Banks borrowed $119 million on net basis in June and $1.98bn in January-June through bond issues in international capital markets, said the central bank. The unexplained inflows amounted to $8.6bn in the first six months of the year, well above the $5.8bn of inflows registered a year ago.

Turkey’s current account deficit declined by 7% y/y to $22.7bn in H1 as foreign trade deficit narrowed by 15% y/y to $24.9bn. The 12-month rolling current account deficit declined to $44.7bn in June from $45.5bn in May. A recent Reuters poll of economists showed that the current account deficit is expected to be $35.8bn at the end of 2015.

Turkey's Balance of Payments (H1)
($ mn) 2014 2015 y/y
CURRENT ACCOUNT  (24,545)  (22,705) -7%
 Goods, Services and Primary Income  (25,024)  (23,118) -8%
 Goods and Services  (20,307)  (17,116) -16%
      foreign trade balance  (29,392)  (24,944) -15%
      exports  85,541  77,735 -9%
      imports  114,933  102,679 -11%
CAPITAL ACCOUNT  (24)  (2) -92%
FINANCIAL ACCOUNT  (18,752)  (14,088) -25%
 Net FDI  (4,702)  (4,170) -11%
      Net acquisition of financial assets  2,297  2,157 -6%
      Net incurrence of liabilities  6,999  6,327 -10%
 Net Portfolio Investment  (10,253)  4,010 -
      Net acquisition of financial assets  1,210  2,615 116%
      Net incurrence of liabilities  11,463  (1,395) -
NET ERRORS AND OMISSIONS  5,817  8,619 48%
Source: tcmb

Related Articles

Four Turkish companies reportedly consider IPOs in London or Istanbul

Turkey’s Enerjisa, Memorial Health Group, Tab Gida and Baskent Gaz are considering public offerings in London or Istanbul, unnamed sources told Bloomberg on July 19. Enerjisa, a 50:50 JV ... more

Turkey bars entry to thousands from more than 140 nations over suspected IS ties

Turkey has arrested and deported thousands of people suspected of having links to the Islamic State group according to a Turkish interior ministry report entitled “Turkey’s Fight ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more