The central bank of Turkey will release the current account data for November 2013 today (January 14).
The market is expecting a deficit of USD 4.2bn. In November 2012 the current account deficit was USD 4.08bn and in October 2013 the current account posted a deficit of USD 2.89bn. If the CA deficit comes in at USD 4.2bn as expected the 12-month cumulative deficit would amount to USD 60.9bn which corresponds to around 7.2% of GDP.
Domestic demand and consequently imports remain strong, TRY has depreciated sharply, having negative consequences on energy import bill while export growth has been mild. Another factor adversely affecting the current account balance has been Turkey’s large amount of gold imports.
The IMF warns Turkey on its vulnerabilities to the external shocks and current account deficit risk. The domestic demand-led growth was leading to a renewed deterioration in inflation and the current account deficit, the Fund said. The IMF expects the current account deficit to narrow to 7.2% of GDP this year from 7.4% in 2013. The government’s CA deficit forecasts for 2013 and 2014 are 7.1% (or USD 58.8bn) and 6.4% (or USD 55.5bn) respectively.
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