Turkey’s current account deficit continues to decline amid oil plunge

“This development in the current account is mainly attributable to a $1.3-billion decrease in the deficit in goods item recording $3.5 billion and a $482-million decrease in primary income deficit recording $723 million. Besides, the services item indicated a net surplus of $575 million, decreasing by $597 million,” said the bank.

“Once again the improvement observed in the foreign trade deficit compared to the same month of last year is the main factor in the decline of the current account deficit in March,” economist Haluk Bürümcekçi said, as quoted by Anadolu Agency. 

“Also, the continuation of low cost energy imports is positive for the course of current account deficit next month,” he added.

Following the launch of the data, Deputy Prime Minister Mehmet Şimşek warned Turkey still had a current account gap problem, despite the recent decline in the deficit.

He said savings were still very low in Turkey, where more investments are needed, in his speech at a meeting, as reported by Reuters.

Turkey can lure more investments only by realizing the required structural reforms, Şimşek added.

The travel item, one of the main items under services, recorded a net inflow of $721 million, decreasing by $381 million compared to the same month of the previous year, according to the Central Bank data. 

Investment income under the primary income item indicated a net outflow of $673 million, decreasing by $505 million in comparison to March 2015, it added.

Direct investment recorded a net inflow of $650 million (increase in net liabilities), decreasing by $144 million.

Official reserves recorded a net increase of around $1.5 billion, according to official data.