Current account deficit falls to record $1.2 bln in August

ISTANBUL - Hürriyet Daily News

This file shows a tanker docked in the southern province of Adana. Turkey’s non-energy current account balance recorded a surplus at $3.4 billion, according to Odeabank. AA photo

Turkey’s current account balance in August recorded a deficit of $1.2 billion, the Central Bank revealed yesterday, a figure that was much better than the market consensus of $1.8 billion.

“Energy imports continued to increase in August on the back of the high level of oil prices, as the non-energy current account balance recorded a record surplus at $3.4 billion, according to our calculations. The record level of the non-energy current account deficit supports the central bank’s recent monetary policy easing and also signals room for a further easing at the Oct. 18 meeting,” Odeabank’s Economic Research and Strategy group said.

The deficit was down $18.1 billion, or 33 percent, to $36.08 billion in the first eight months of 2012 compared with the same period last year. Accordingly, the 12-month rolling current account deficit declined to $59.0 billion in August from $61.9 billion in July.

“This development is mainly attributable to the $16.1 billion decrease in the foreign trade deficit, which recorded $45.1 billion, and the $1.4 billion increase in the net services income, which reached $13.1 billion, as well as a $718 million decrease in net income outflows, which recorded $4.8 billion,” the central bank said.

“We expect to see further improvements in the current account deficit (albeit at a slower pace compared to previous months) in the coming months (until November) because of the overall slowdown in economic activity, the increasing gold exports, and the relatively low petroleum price,” said Özgür Altuğ, the chief economist at BGC Partners, in a note to investors.