Turkey’s cur­rent ac­count seen post­ing $2bn sur­plus in Septem­ber

Gulf Times - Gulf Times Business - - FRONT PAGE -

Turkey’s cur­rent ac­count is ex­pected to have recorded a sur­plus of $2bn in Septem­ber, a Reuters poll showed yes­ter­day, as the trade deficit re­mains rel­a­tively low and tourism in­come con­tin­ues to pro­vide sup­port. Turkey’s an­nual cur­rent ac­count deficit, which climbed to $58bn in May 2018, has dropped dra­mat­i­cally fol­low­ing a cur­rency cri­sis that saw the lira lose nearly 30% of its value against the dol­lar last year.

The 12-month cu­mu­la­tive cur­rent ac­count swung to a sur­plus in June for the first time in nearly 17 years and has re­mained pos­i­tive since.

The me­dian es­ti­mate in the Reuters poll of 12 econ­o­mists for Septem­ber’s monthly cur­rent ac­count bal­ance stood at a sur­plus of $2bn with fore­casts rang­ing be­tween sur­pluses of $1.8bn and $2.4bn.

Eco­nomic ac­tiv­ity slowed sub­stan­tially in the wake of the lira cri­sis, while the cost of im­ports surged. The econ­omy has since showed signs of re­cov­ery.

The cur­rent ac­count will show a sur­plus in Septem­ber due to a rel­a­tively low trade deficit and con­tin­ued sup­port from tourism rev­enues, al­beit lower than in the peak tourism months, said Hilmi Yavas, economist at Yatirim Fi­nans. “On the other hand, we ex­pect an ac­cel­er­a­tion in im­ports in the re­main­ing months of the year and tourism in­come will slow.

So, we will prob­a­bly record a sur­plus in Oc­to­ber as well but it is pos­si­ble that we will post a deficit again in Novem­ber,” he said, adding that the deficit could widen sharply in De­cem­ber. He said the 12-month cu­mu­la­tive sur­plus had likely peaked in Au­gust, when it stood at slightly above $5bn, and would prob­a­bly re­main around the same level in Septem­ber but start to de­cline in Oc­to­ber.

The me­dian es­ti­mate of 11 econ­o­mists who par­tic­i­pated in the Reuters poll was for a sur­plus of $100mn for the cur­rent ac­count bal­ance for the whole of 2019. Es­ti­mates ranged be­tween a deficit of $3.7bn and a sur­plus of $9.8bn. Turkey’s for­eign trade deficit, the largest com­po­nent of the cur­rent ac­count, rose 6.6% year-on-year in Septem­ber to $2.056bn, of­fi­cial data shows.

Turkey’s cen­tral bank is ex­pected to an­nounce the Septem­ber cur­rent ac­count data at 0700 GMT on Novem­ber 12.

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