NEWS ECONOMY NEWS        14/02/2020

Turkey shows a current account surplus of USD 1,674 million in 2019

The Turkish Central Bank recorded a USD 2,798 million current account deficit in December 2019, an increase of USD 1.731 (162.2%) on the deficit of USD 1,067 million for the same month of the previous year.

 

The Central Bank showed exports as USD 15,582 million and imports at USD 18,984 million in December 2019, giving a trade deficit of USD 3,402 million, an increase of USD 2,089 million on the trade deficit of USD 1,313 million of the same month of the previous year.

 

With regards items of the current account, the Central Bank’s analysis was as follows :

“This development in the current account is mainly attributable to USD 2,089 million increase in the goods deficit recording net outflow of USD 3,402 million, as well as USD 93 million increase in primary income deficit to USD 1,087 million. Gold and energy excluded current account surplus recorded USD 1,454 million indicating a decrease of USD 1,429 million compared to December of 2018. Travel item under services recorded a net inflow of USD 1,112 million, increasing by USD 214 million compared to December of 2018. Investment income under primary income item indicated a net outflow of USD 955 million increasing by USD 75 million in comparison to December of 2018. Secondary income recorded net inflow of USD 291 million increasing by USD 165 million in comparison to December of 2018.”

 

With regards the related Financial Account, the Central Bank’s analysis was as follows :

“Direct investment recorded a net inflow of USD 281 million. Portfolio investment recorded a net outflow of USD 871 million. As regards to sub-items through liabilities, non-residents’ equity securities transactions recorded net purchases of USD 89 million and government domestic debt securities transactions recorded net purchases of USD 12 million. Regarding the bond issues in international capital markets, banks realized net borrowing of USD 206 million. Under other investment, banks’ currency and deposits within their foreign correspondent banks increased by USD 272 million and non-resident banks’ deposits held within domestic banks increased by USD 333 million, on net basis. Regarding the loans provided from abroad, General Government realized net borrowing of USD 45 million, while banks and other sectors realized net repayments of USD 13 million and USD 3,027 million, respectively. Official reserves recorded net outflow of USD 539 million.”

 

Turkey’s current account surplus for the year of 2019 is USD 1,674 million, which compares with a deficit of USD 28,261 million for 2018 and a deficit of USD 46,592 million for 2017. The current account surplus in 2019 reflects the dramatic fall in imports following the currency crisis in the Summer of 2018 and the deepening economic crisis, rather than any improvement in the health of the Turkish economy. The Turkish government’s efforts to boost demand and growth in the economy through lower interest rates over the second half of 2019 will see a gradual increase in imports and a return to a current account deficit scenario in 2020. Due to the lack of investment and continuing underlying weak state of the manufacturing sector in particular, exports are not likely to grow substantially within the foreseeable future, but will remain firm.

 

The Central Bank also announced revisions which it will make to the presentation of previous years’ annual balance of payments figures, the most important being the revision to trade figures to employ the “General Trade System” instead of the “Special Trade System” method of calculating exports and imports. The Bank’s comment was as follows:

“Based on the year-end studies in accordance with the “Revision Policy”, starting from 2015, a number of revisions mainly in goods, services, direct investment, portfolio investment and other investment items have been made on the balance of payments statistics. While some of these revisions are only classification changes, others have an impact on the "Current Account" and the "Financial Account", and hence on the "Net Errors and Omissions" item. The trade data on customs warehouses are reflected to the goods via adjustment item, which covers the free zone trade statistics as well, beginning from 2013 in order to transform “Special Trade System” to the “General Trade System”. As a result of above mentioned revisions, the “Net Errors and Omissions” item has been revised upwards by USD 660 million in 2013, USD 1,337 million in 2014, USD 1,124 million in 2018, in contrast to downward revisions of USD 19 million in 2015, USD 1,694 million in 2016, USD 280 million in 2017 and USD 1,929 million in January-November 2019.”

 



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