Turkey's current account deficit narrows by 1/3 in May

Turkey's current account deficit was down by one-third in May, the Turkish Central Bank said Thursday.

The 33 percent year-on-year fall reduced the deficit to $2.86 billion in May from $4.27 billion a year earlier, bringing the 12-month rolling deficit to $27.25 billion.

"Development in the current account is mainly attributable to the $1.724 billion decrease in the deficit in goods [foreign trade balance] item recording a $3.764 billion and $292 million decrease in the primary income deficit recording $442 million," the bank said.

The month saw exports rise by just under a percentage point to $12.14 billion, while imports fell to $17.19 billion, a 3.8 percent decline.

"The current account deficit retains its long-term positive trend. We may observe a temporary increase in the current account deficit this summer due to tourism revenues," said Ziraat Investment economist Bora Tamer Yılmaz.

"But we believe that thanks to the Central Bank's financial stabilization measures, the current account deficit saw an improvement in the structural sense, excluding oil prices," he added.

Tourism revenues, traditionally one of most important sources of Turkey's foreign exchange, was a concern for some time, as the downing of a Russian fighter jet by the Turkish military last November saw the number of Russian tourists, who normally flock to Turkey's tourism destinations, plummet.

"We expect probable volatility in the summer months turn back to normal in the winter months with the completion of the tourism season," Yilmaz said.