Turkey’s cur­rent ac­count sur­plus in 2019 was first in 18 years

Gulf Times - Gulf Times Business - - FRONT PAGE -

Turkey achieved a higher-than-ex­pected cur­rent ac­count sur­plus of $1.674bn last year, its first since 2001, of­fi­cial data showed yes­ter­day, but it may re­turn to deficit this year as growth picks up af­ter ag­gres­sive mon­e­tary eas­ing. The deficit, which reached $58bn in May 2018, turned to sur­plus last year, af­ter a cur­rency cri­sis drove up im­port prices and hit do­mes­tic de­mand.

But af­ter year-over-year growth re­turned in the third quar­ter of 2019, the cur­rent ac­count started post­ing monthly deficits.

The monthly cur­rent ac­count deficit widened sharply to $2.798bn in De­cem­ber, from $365mn a month ear­lier.

The full-year fig­ure ex­ceeded a fore­cast of a $1.18bn sur­plus in a Reuters poll.

The monthly deficit was be­low a fore­cast of $3.05bn. The central bank has slashed its pol­icy rate by 1,275 ba­sis points since July to pro­mote eco­nomic growth, while also tak­ing mea­sures to en­cour­age banks to lend more.

The central gov­ern­ment’s bud­get deficit surged 70% in 2019, as it boosted spend­ing in the face of the re­ces­sion.

The gov­ern­ment sees growth of 5% in 2020. The share of for­eign hold­ings in Turk­ish do­mes­tic debt is now at a record low of 9.4%, af­ter lo­cal as­sets were hit last week by one of the largest bouts of for­eign dis­in­vest­ment in the last five years, Deutsche Bank said yes­ter­day. Sources told Reuters on Thurs­day the central bank plans to ad­just its re­quired re­serve guide­lines to keep a lid on some im­ports and avoid cur­rent ac­count de­te­ri­o­ra­tion.

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