Turkish Deputy PM Babacan sees 2015 CA deficit at around 4% of GDP if oil prices remain at current levels

By bne IntelliNews February 12, 2015

Turkey’s current account deficit could come in at around 4% of GDP at the end of this year, if the oil prices remain at $50-$60, said Deputy PM Ali Babacan on February 12, a day after the Central Bank data showed the country’s current account gap fell as much as 29% in 2014 to $45.8bn from $64.6bn in 2013, thanks to the 20% decline in the foreign trade deficit.

The effects of the declining oil prices on the current account deficit have not been fully seen yet, said Babacan, adding that last year’s current account deficit corresponded to about 5.6% of GDP and if the oil prices remain at their current levels Turkey could see a much lower deficit this year.

Many economists anticipate that the low oil prices will support the rebalancing this year. The current account is forecast to retreat further to $35.7bn at the end of 2015, a recent Reuters poll showed. But the depreciation of TRY, nearly 7% this year already, and the troubles in Europe, Turkey’s largest export market, cause some concern. The government does not have any currency rate target, Babacan also said on February 12, noting that any communication regarding currency rates is the Central Bank’s job. He cannot comment on the outcome of Central Bank’s monetary policy committee meeting, the Minister added. President Recep Tayyip Erdogan and economy minister Nihat Zeybekci recently renewed attacks on the Central Bank, demanding a rate cut to boost growth. But Babacan, the economy’s czar, defended earlier this week the decision makers at the Central Bank, saying that there is a highly competent team at the Bank who are making the right decisions at the right time. Erdogan’s repeated criticisms raise questions about the independence of the Bank.

Turkey's Balance of Payments
  Jan-Dec
(USD bn) 2013 2014 y/y
CURRENT ACCOUNT -64.7 -45.8 -29%
      exports 161.8 169.0 4%
      imports 241.7 232.6 -4%
      foreign trade balance -79.9 -63.6 -20%
CAPITAL ACCOUNT -0.096 -0.066 -31%
FINANCIAL ACCOUNT -62.0 -43.658 -30%
       Net FDI -8.83 -5.483 -38%
       Net Portfolio Investment -24.0 -20.0 -17%
NET ERRORS AND OMISSIONS 2.80 2.24 -20%
Source: tcmb      

Related Articles

Turkey postpones plan to sell firms seized after coup attempt

Turkey has put on hold its plan to sell almost 600 companies worth about $10bn seized in the aftermath of the failed military coup, people familiar with the matter told Bloomberg on March 23. The ... more

Turkey to maintain EU economic relations but review political ties, says Erdogan

Turkey will maintain its commercial ties with the European Union but will review its political and administrative ties with the bloc after the April 16 referendum, Turkish President Recep Tayyip ... more

Turkey easily tops table for Twitter content removal requests

Turkey accounted for more than half of all content removal requests received worldwide by Twitter during the second half of 2016, according to the social media company’s ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss