Turkey’s current account deficit shrinks to 35-month low

ANKARA

DAILY NEWS Photo

Turkey’s current account deficit, the main sore spot of the emerging economy, stood at $2.02 billion in October this year, making for an annualized gap of $45.72 billion, the lowest since December 2010.

The Central Bank data comes at a time when the economy is apparently shifting from the fast lane to a more moderate growth pace.

During the January-October 2014 period, Turkey’s total current account deficit - which represents the total balance of trade of goods and services, net factor income and net transfer payments - declined by almost 40 percent from last year, according to the Dec. 11 data.

The total current account deficit over that period dropped to $33.1 billion, a decrease of $19.3 billion compared to the same period the previous year, the Bank said in a statement.

Turkey’s current account deficit was $2.3 billion in September.

The October current account deficit was estimated to stand at $1.9 billion, according to Anadolu Agency’s Growth Expectation survey.

The Central Bank attributed the decrease to a $16.8 billion drop in the foreign trade deficit and a $2.2 billion surplus in the services sector.

The foreign currency inputs from “unknown sources” totaled $5.92 billion in the first 10 months of the year.

Turkey’s gross domestic product (GDP) increased a mere 1.7 percent year-on-year in the third quarter, according to official data released by the Turkish Statistical Institute (TÜİK) a day earlier, far below forecasts that had predicted an increase of around 3 percent.

The economic administration slashed its growth forecast for 2014 from 4 percent to 3.3 percent in October, citing external factors including the chaos in neighboring Syria and Iraq and the increased uncertainty in the global economy. The International Monetary Fund (IMF) has also recently slashed its 2014 growth forecast for Turkey to 2.3 percent.