Current account gap decreases slightly

ISTANBUL

A good start to 2013 by exporters helped the balance of payments improve in the first month of the year, according to Economy Minister Çağlayan.

Turkey’s current account deficit narrowed by 2 percent in January compared to same month in the previous year, falling to the lowest level in 26 months, according to recently revealed data by Turkey’s Central Bank.

Turkey’s current account deficit narrowed to $5.63 billion in January from $5.73 billion a year ago, slightly above the market expectations, which were seen around $5.3 billion, according to figures revealed yesterday.

With the Turkish economy’s slowdown and rise in whe exports, foreign trade has been going through a balancing period.

Increase in exports

“The main reason behind the good current account deficit performance in January is an increase in our goods and service exports. As the balance of payments display, we see two-digit growth with both of them,” Turkey’s Economy Minister Zafer Çağlayan said, adding that this proved Turkish business people should produce value-added goods and services and sell these abroad to achieve $500 billion worth export.

The minister, who said even 2012 was a good year for Turkey in terms of cooling down account deficit but that 2013 and 2014 should be better with new incentives launching the industry, anticipated the year-end deficit figures to remain below $60.7 billion estimation of the middle-term program.

Change in methodology

The Central Bank also revised the annual current account deficit amount for last year, taking into Turkey’s Statistical Institute’s (TÜİK) recent methodology change in calculating tourism
revenue data.

TÜİK has updated the methodology it uses to produce tourism statistics in accordance with European Statistics Office (Eurostat) and said the tourism revenues, previously calculated at $23.4 billion, was actually $29.3 billion, with an increase of $5.9 billion.

Due to this change the Central Bank raised the current account deficit for 2012 to $48.8 billion, from $47 billion.

The current account deficit is one of the leading problems of the relatively sound Turkish economy, with major international rating agencies citing that the gap is an obstacle behind a rating upgrade.