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)|
|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%|
|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%|
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