Turkey’s current account deficit narrows in June

ANKARA

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Turkey’s current account deficit narrowed in June to $3.36 billion from $4.44 billion in May, the Turkish Central Bank said on Aug. 11, helped by a slowdown in the foreign trade deficit and a fall in oil prices, which cut the cost of energy imports. 

A Reuters poll had forecasted a deficit of $3 billion.

The deficit also narrowed by $812 million in June compared to the same month of 2014. The 12-month gap was announced as $44.7 billion by the Central Bank. 

“A decrease in the foreign trade deficit by $1.4 million to $4.8 billion in June compared to the same month of 2014 played a role in the decreasing trend in the current account gap,” the bank said in a note on its website.  

“The ongoing fall in energy imports is supportive, and the domestic demand growth remains subdued,” Finansbank said in a note to clients, as quoted by Reuters. 

“We maintain our view that the current account balance will narrow at a mild pace in the forthcoming period,” it added.

Turkey’s deficit is mainly financed by capital inflows, which have been hit in recent months by continuing uncertainties in the political scene. The ongoing coalition formation talks have been expected to finalize by the markets.