Turkey Current Account Swings To Deficit In August

turkey-current-account-swings-to-deficit-in-august

Turkey’s current account turned to a deficit in August from a surplus in the previous year, data from the central bank showed on Tuesday.

The current account balance showed a deficit of $3.112 billion in August versus a surplus of $1.075 billion in the corresponding month last year.

The 12-month rolling deficit rose to $40.9 billion from $36.7 billion in July, which represented 5.1 percent of GDP, and was the highest since the 2018 financial volatility.

The current account deficit widened in August because of rising energy prices, a revival of gold imports, and domestic demand-driven factors, Muhammad Mercan, an economist at ING said.

“We expect the current account to remain under pressure in the near term given the marked deterioration in the terms of trade, accommodative policy stance, and less supportive global outlook with increasing growth concerns,” Mercan, added.

Excluding gold and energy, the current account reported a surplus of $6.276 billion, up from $ 4.971 million a year ago.

The goods trade deficit rose to $9.700 billion in August from $9.357 billion in July, while the surplus on services grew notably to $7.236 billion from $5.754 billion.

The primary income balance showed a deficit of $685 million in August, which increased from $538 million a month ago.

Meanwhile, the secondary income surplus stood at $37 million versus $48 million in July.

The capital account balance turned to a surplus of $9 million from a shortfall of $16 million in the prior month. Data also showed that the surplus in the financial account shrank to $855 million from $1.449 billion.

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