Current gap soars by 9.6 percent due to export fall

ISTANBUL

Turkey recorded a $10.9 million current account deficit in the first two months of 2013, with a 9.6 percent increase from the previous year’s same period, mainly due to the broadening foreign trade gap.

The current account deficit rose by 20 percent in February, reaching $5.1 million, after falling to the lowest level in 26 months in January, as the Turkish Central Bank’s balance of payments data revealed yesterday.

February figures indicate the payment balances, which had narrowed with balancing in foreign trade thanks to a rise of exports, had begun to deteriorate due to economic slowdown and a widening gap between imports and exports.

“This development is mainly attributable to the $844 million increase in foreign trade deficit recording $11.5 million, and a $63 million decrease in net services income recording $1.3 million,” said the Turkish Central Bank in the statement.

Turkish Economy Minister Zafer Çağlayan said the “slight upward movement in the current account” implies that the account will be over 2012 levels in 2013, but still won’t be above the year-end estimation of the mid-term program. “Turkey should be more patient about the current deficit issue. We will solve this in the middle and long term with more production and more saving,” he said, pointing to the government’s export-focused manufacturing encouragement programs and incentive schemes targets as solution to this problem.

Foreign direct investments and strategic investments are the keys to the resolution of Turkey’s deficit problem, he said. Turkey recorded a $48.9 billion current account deficit in 2012.