Turkey’s current account deficit hits $47.1 billion in 2017

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Turkey ran a current account deficit of $7.7 billion in December 2017, slightly above forecasts, according to data from the Central Bank.

The current account gap thus decreased by $4.36 billion last December compared to the same month of 2016, the Central Bank data showed on Feb. 14.

Data showed that the annual deficit reached $47.1 billion in 2017, from $32.6 billion in the previous year.

Energy, gold imports

İş Investment economist Muammer Kömürcüoğlu told state-run Anadolu Agency that the rise in the 12-month rolling deficit – nearly $14 billion – was mainly driven by energy and gold imports.

“This widening is related to energy and gold imports, which added $8.9 billion and $11.8 billion to the deficit respectively,” Kömürcüoğlu said.

“But it is good to see a narrowing in the core deficit in a high-growth year,” he added, highlighting that Turkey’s core deficit (excluding gold and energy) shrunk by $6.7 billion.

Kömürcüoğlu also said strong external demand, especially from EU countries, and recovery in tourism revenues would positively affect the current account deficit in 2018.

Regarding the December 2017 data, the Bank said developments in the current account are mainly attributable to the $3.16 billion increase in the goods deficit, recording a net outflow of $7.42 billion, as well as a $231 million increase in primary income deficit to $1.18 billion.

Travel items under services recorded a net inflow of $780 million, increasing by $80 million compared to the same month of the previous year, according to the Bank data.

Investment income under the primary income item indicated a net outflow of $1.09 billion, thus increasing by $208 million compared to the same period of the previous year.

Secondary income recorded net inflow of $240 million, increasing by $17 million compared to the same month of the previous year.

Decline in direct investment

In December 2017, direct investment recorded a net inflow of $490 million, decreasing by nearly $1 billion compared to the same month of the previous year, the Central Bank data also showed.

Portfolio investment recorded a net inflow of $344 million.

Regarding sub-items through liabilities, non-residents’ equity securities transactions recorded net purchases of $142 million, while government domestic debt securities transactions recorded net sales of $266 million.

Regarding bond issues in international capital markets, banks realized net borrowing of $305 million.

“Other investment recorded a net outflow of $1.99 billion,” the Bank said.

Meanwhile, as a result of some revisions the net errors and omissions item was revised downwards by $897 million in 2012, $536 million in 2013, $921 million in 2014, $442 million in 2015, and $2.52 billion in January-November 2017, in contrast to the $44 million upward revision in 2016, bringing the cumulative downward revision to $5.3 billion for the entire period, according to Central Bank data.

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