Turkish Current Account Deficit Falls to 26-Month Low

The Turkish current account deficit fell again in January, according to the latest data from the Central Bank. According to the report the deficit fell 2% compared to January 2012 to the lowest level in 26 months. Turkey has become one of the most vibrant emerging markets in the world during the last 2-3 years, with the current account deficit one of its few remaining hurdles to overcome.

As of January 2013 the Turkish current account deficit was $5.63 billion, down from $5.73 billion last year leaving it slightly above market expectations. With the Turkish economy’s slowdown and rise in the exports, foreign trade has been going through a balancing period.

“The main reason behind the good current account deficit performance in January is an increase in our goods and service exports. As the balance of payments display, we see two-digit growth with both of them,” Turkey’s Economy Minister Zafer Çağlayan said, adding that this proved Turkish business people should produce value-added goods and services and sell these abroad to achieve $500 billion worth export.

According to Caglayan 2012 was a good year in terms of cooling the account deficit, but 2013 and 14 are to be even better because of new incentives due to be launched.

The Central Bank also revised the annual current account deficit amount for last year, taking into Turkey’s Statistical Institute’s (TÜİK) recent methodology change in calculating tourism revenue data.

TÜİK has updated the methodology it uses to produce tourism statistics in accordance with European Statistics Office (Eurostat) and said the tourism revenues, previously calculated at $23.4 billion, was actually $29.3 billion, with an increase of $5.9 billion.

Due to this change the Central Bank raised the current account deficit for 2012 to $48.8 billion, from $47 billlion.