Trade gap to narrow due to weak demand

Bloomberg

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The shortfall shrank to $1.4 billion from $5.4 billion in March 2008, according to the median estimate of 10 economists surveyed by Bloomberg. The Turkish Statistical Institute is due to report the data at 5 p.m. tomorrow.

Industrial production fell in February by the most since records began in 1986 as growth slowed and the global credit crunch forced the government to look to the International Monetary Fund, or IMF, for a loan. A slump in energy prices is also helping to reduce the cost of imports.

"We’re seeing a slowdown in domestic economic activity and a slowdown in imports, causing a clear narrowing in the deficit," said Ayşegül Aykol Kocabaş, economist for Tekstilbank in Istanbul, who forecasts the current-account deficit will narrow to about $9 billion this year from $41.4 billion in 2008. "That is clearly good news from a financing perspective."

The government seeeks a new IMFaccord to support the currency and supplement the budget as the slowdown reduces tax revenue. The economy shrank 6.2 percent in the last quarter of 2008, its first contraction in seven years.