Widened current account deficit due to decrease in tourism, foreign trade deficit

Turkey's Central Bank on Monday said the country's current account deficit had widened, standing at $1.68 billion in October - up almost by $1.33 billion year-on-year.

The Central Bank of the Republic of Turkey (CRBT) disclosed the balance of payment figures for October 2016. Accordingly, the current account deficit reached $1.675 billion in October, with a $1.332-billion surge when compared to the same month last year. As a result, the 12-month current account deficit stood at $33.773 billion.According to the bank, the fall in the services surplus due to the slipping tourism revenue plus a growing foreign trade deficit of $333 million from a year earlier was the main reason for the increase.

In a statement, the central bank said: "This development in the current account is mainly attributable to the increase in the deficit in goods items by $333 million to $2.804 million, as well as a $916 million decrease in the services surplus to $1.793 million and a $137 million increase in the primary income deficit to $771 million." Travel items under services recorded a net inflow of $1.69 billion, decreasing by $630 million compared to the same month of the previous year, the bank added. Turkish revenues from tourism fell by 32.7 percent to $8.28 billion in the third quarter of the year, official figures showed on Oct. 31.

Foreign direct investment (FDI) net inflows (net liability increase) amounted to $665 million in October. Accordingly, FDI net inflows increased by $53 million compared to the same month of the previous year, reaching $665 million.

Regarding loans from abroad, on the other hand, banks have recorded a net disbursement of $215 million followed by other sectors with $1.150 billion. Official reserves increased by $2.923 billion.