Turkey’s current account gap to decrease except in oil, gold: Şimşek

ISTANBUL

Deputy Prime Minister Mehmet Şimşek has said the current account deficit would decrease in the upcoming period with the exception of oil and gold items, adding that some slowdown may even be the case in economic activity.

Speaking at the 61st General Board Meeting of the Turkish Banks Association (TBB) on May 7, Şimşek also said the current account gap would decrease to 3 percent of the gross domestic product in the upcoming years.

“A consecutive rise in consumer loans stopped. We have even started to see a downward trend in these loans. In the upcoming period, we should expect a decline in Turkey’s current account deficit with the exception of gold and oil items,” he said at the meeting in Istanbul.

In the wake of a high economic growth trend, Turkey’s 12-month current account deficit rose to $53.3 billion at the end of February. The main driver behind the deficit increase was a hike in energy and gold imports. Turkey’s economy has recently been warned by rating agencies and the International Monetary Fund mainly for “overheating concerns.” 

“Turkey’s current account deficit is not higher than 4.4 percent of its GDP. Thanks to a robust recovery in our tourism, we will even see this will be below 4 percent,” Şimşek said.

“In the upcoming period, even economic activity may slow down, as some indicators have shown. On the other hand, our export markets seem to remain strong and our exports will keep rising,” he added.

Turkey can see its current account deficit decrease to 3 percent of the GDP or below in the next couple of years, Şimşek noted, adding that the realization of the newly-subsidized projects would help Turkey decrease its current account gap by nearly 20 billion in the next seven or 10 years.