Turkey’s current account deficit drops nearly $3 billion in July

ANADOLU AGENCY
ANKARA
Published
A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. (Reuters Photo)
A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. (Reuters Photo)

Turkey's current account deficit dropped 62.8 percent or -- nearly $3 billion -- year-on-year in July, according to the Turkish Central Bank on Friday.

The deficit reached $1.75 billion in the month, down from $4.7 billion July 2017.

The 12-month rolling deficit reached $54.6 billion, according to the bank's report on the balance of payments.

The goods deficit fell by $2.5 billion to nearly $4.8 billion while primary income gap decreased by $25 million to $592 million.

"Services item recorded net inflow of $3.6 billion increasing by $673 million compared to July last year, mainly stemming from $578 million increase in net travel revenues observing as $3.1 billion in July 2018," the bank also said in the statement published in English.

Muammer Kömürcüoğlu, an economist with the investment house İş Yatırım, said in a client note that the improvement in current account gap will likely accelerate for the rest of the year.

"It is good news to see that official reserves and capital inflow started to rise again in July," Kömürcüoğlu said.

Official reserves recorded a net inflow of $2.4 billion in the month, according to the bank.

"Slowdown in domestic demand we expect in the second half will reduce imports, and the loss in Turkish Lira will support exports which leads us to revise our projection for the annual current account deficit down to $43 billion from $55 billion," Kömürcüoğlu said.

Official reserves recorded a net inflow of $2.4 billion in the month, according to the bank.

"Slowdown in domestic demand we expect in the second half will reduce imports, and the loss in Turkish Lira will support exports which leads us to revise our projection for the annual current account deficit down to $43 billion from $55 billion," he said.

Turkey's annual current account deficit in 2017 was around $47.3 billion, compared to the previous year's $33.1 billion.

According to official figures, the country's highest annual current account deficit in the last 20 years was in 2011 at $74.4 billion.

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