Turkey's current account deficit stood at $4.94 billion in June, up more than $1.7 billion year-on-year due to a decline in income from tourism and an increase in imports, the Central Bank of the Republic of Turkey (CBRT) announced yesterday.
The 12-month rolling deficit rose to $29.4 billion, up from $27.7 billion in May of this year.
A fall in the services surplus and an increase in the deficit in goods trade along with higher primary income were the main reasons for the increase, according to the bank.
"This development in the current account is mainly attributable to a $1.23 billion decrease in the services surplus to $1.2 billion and a $326 million increase in the deficit in goods, reaching $5.2 billion," the bank said in a statement on its website.
KapitalFx Analyst Enver Erkan cited that the fall in tourism revenue had a negative effect on the overall deficit, causing a loss in revenue from the country's tourism sector this year.
"Deficit in foreign trade narrowed to $5 billion compared to 2015 [and] continues to improve in the yearly basis," KapitalFx analyst Enver Erkan said.
Turkey's revenues from tourism fell to $5 billion in the second quarter of the year, a 35.6 percent decline from the same period in the previous year, the Turkish Statistical Institute (TurkStat) said on July 29. The country's first half-year total revenue from tourism was $9.04 billion, down from $12.6 billion a year earlier.
Erol Gürcan, research analyst at Gedik Yatırım, echoed Erkan's comments on Turkey's tourism , saying, fluctuations in revenue are mainly attributable to the decline in the number of Russian tourists.
The number of Russian tourists visiting Turkey in the first half of the year decreased to 183,828, an 87.36 percent decline compared to the same period in 2015, according to data by the Tourism Ministry.
Gürcan said the number of tourists from Europe also declined because of uncertainty after the U.K. voted to leave the EU, which had a clear influence on the current account deficit. "Normally, the number of tourists from the Middle East countries should have compensated for travel items under services but coinciding with the holy month of Ramadan in June had a bit of a negative effect," Gürcan said. "There is a notable decrease in foreign direct investment compared to the same month of 2015, Adnan Cekcen," deputy research manager at Destek Yatirim said. However, Cekcen said that the most important reason for the increase in deficit has been the decline in tourism revenue.
Tourism valuable source of foreign currency for Turkey
Meanwhile, the first half of the year has traditionally been the low season for tourism, as the winter months attract a smaller number of tourists who prefer to visit the country's world-famous resorts and historic monuments in summer.
Income from tourism is a valuable source of foreign currency for Turkey, constituting nearly 4 percent of national income last year with $31.5 billion.
On July 29 , the Turkish Statistical Institute (TurkStat) said the country's exports in June rose 8.1 percent to $12.9 billion, and its trade deficit widened by 5 percent, after rising 7 percent to $19.5 billion in imports a year earlier.
In the first half of the year, exports shrank by 2.4 percent compared to the same period from the previous year, while imports dropped by 6.7 percent stemming from a 16 percent reduction in the foreign trade gap to $28 billion.