Turkey’s current account deficit narrows as oil prices continue to drop

ANKARA

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Turkey’s current account deficit narrowed to $2.1 billion in November 2015, a decrease of $3.689 billion from November of the previous year, the Turkish Central Bank said in a statement on Jan. 11.

The 12-month rolling deficit narrowed to $34.7 billion in November 2015 from $38.4 billion the previous month, added the statement. The country’s current account gap declined to $135 million in October 2015. 

This development in the current account largely stemmed from a $3.6 billion decrease in the deficit in goods, said the bank, adding that services came in at a net surplus of around $1.5 billion, an increase of $159 million.

“Cheaper energy was the major factor in the current account narrowing,” Vladimir Miklashevsky, an economist with Danske Bank in Helsinki, was quoted as saying by Anadolu Agency. 

Finansbank economist Deniz Çiçek said the decline in oil expenses had played a positive role. 

“We expected the current account gap would decrease to around $32 billion by the year’s end. While lower oil prices brought a rebalancing of the current account sheet, some recovery in Turkey’s exports to the European Union and a moderate demand growth in the domestic market also made a positive contribution to this field. Russia’s sanctions against Turkey will, however, negatively affect goods exports and tourism income negatively in the coming period. Nevertheless, the deficit will continue to decline in 2016,” said Çiçek, as quoted by Reuters. 

The government has announced the expected current account gap to GDP will be around 4.4 percent in 2015, 3.9 percent in 2016, 3.7 percent in 2017 and 3.5 percent in 2018 in its new medium-term economic program, which was released on Jan. 11. 

Direct investment recorded a net inflow of $92 million in November 2015 and official reserves recorded a net decrease of $212 million, according to official data.