Turkey’s 12-month CA in surplus in June, first in 17 years
ISTANBUL, Aug 10, (RTRS): Turkey’s 12-month cumulative current account recorded a surplus in June for the first time in nearly 17 years, data from the central bank showed on Friday, even as the monthly current account showed a more-thanexpected deficit of $548 million.
Turkey’s large current account deficit, which reached $58 billion on a 12-month basis in May 2018, has long been a main concern for investors because it makes the economy reliant on speculative foreign inflows to finance the shortfall.
However, a currency crisis last year saw economic activity slow dramatically and caused the price of imports to surge, leading to a reduction in the current account deficit.
The current account in June was boosted by increased tourism revenues and a lower trade deficit, recording a relatively small deficit of $548 million.
The median estimate in a Reuters poll was a deficit of $265 million.
Economists expect the 12-month surplus, which stood at $538 million in June, to rise in July and they say the annual 2019 current account balance will depend on growth and economic recovery in the rest of the year. The year-end median estimate in the Reuters poll was a deficit of $8.25 billion.
In May, the current account surplus was $317 million. In 2018 Turkey’s current account deficit was $27.633 billion.
The 12-month cumulative current account last showed a surplus in November 2002.
Meanwhile, Turkey’s industrial production is expected to register a 1.01% annual contraction in June, a Reuters poll showed on Friday, as the economy struggles to leave behind the damage of last year’s currency crisis.
The economy contracted 2.6% in the first quarter of this year after a 3% drop in the last quarter of 2018. Economic activity has remained slow since, with the central bank’s policy rate standing at 19.75% after it cut by 425 basis points in July.
The median estimate in a Reuters poll of 6 economists showed a year-on-year contraction of 1.01% of the calendar-adjusted industrial production index. Forecasts ranged between a growth of 0.1% and contraction of 2.4%.
Turkish industrial production, seen as a precursor to growth figures, slid a less-than-expected 1.3% year-onyear in May, data showed, logging its ninth consecutive month of decline after the economy tipped into recession last year.
Also: ISTANBUL: The Turkish Statistical Institute will announce the industrial production figures for June on Aug 16 at 0700 GMT.
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