Turkey’s March current account deficit rises 47% y/y

By bne IntelliNews May 12, 2015

Turkey’s current account deficit rose by 47% y/y to $4.96bn in March, above the market consensus forecast of $4.3bn, data of the central bank showed on May 12.

Foreign trade deficit increased by 45% y/y to $4.86bn with exports falling 16% y/y and imports declining 5% y/y.

The central bank reported $900mn FDI inflows into the country, representing a 37% y/y decline, but the portfolio outflow was a significant $2.24bn in the month which followed an outflow of $479mn in February. Turkey’s equity market saw an outflow of $580mn in March after $503mn outflow in the previous month. There was an inflow of $444mn into the government debt securities in March after the central bank reported an outflows amounting to $1.25bn in the previous two months.

The central bank also reported inflow of $91mn through “the net error and omission” item which was significantly low compared to the $4.7bn of inflows in February. The inflows under this item in the first three months of the year amounted to $3.89bn vs $8.3bn a year ago.

Banks and other sectors borrowed $553mn and $107mn on net basis, respectively, in March through bond issuances in international markets, said the central bank.

Turkey’s current account deficit fell by 7.4% y/y to $10.9bn in January-March. The 12-month rolling current account deficit increased to $45.5bn in March from $43.9bn in February.

The government forecasts the current account deficit to be $46bn (or 5.4% of GDP) this year and $49.2bn (5.4% of GDP) next year.

Turkey's Balance of Payments (Q1)      
($ mn) 2014 2015 y/y
CURRENT ACCOUNT  (11,788)  (10,910) -7%
 Goods, Services and Primary Income  (11,975)  (11,110) -7%
 Goods and Services  (9,530)  (8,447) -11%
      foreign trade balance  (12,049)  (11,211) -7%
      exports  42,950  39,004 -9%
      imports  54,999  50,215 -9%
CAPITAL ACCOUNT  (21)  (2) -90%
FINANCIAL ACCOUNT  (3,525)  (7,022) 99%
       Net FDI  (3,082)  (2,385) -23%
       Net Portfolio Investment  2,475  1,540 -38%
NET ERRORS AND OMISSIONS  8,284  3,890 -53%
Source: tcmb      

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