The Turkish Central Bank recorded a USD 4,923 million current account deficit in March 2020, an increase of USD 4,803 (4,002.5%) on the deficit of USD 120 million for the same month of the previous year.
The Central Bank showed exports as USD 13,473 million and imports at USD 17,762 million in March 2020, giving a trade deficit of USD 4,289 million, an increase of USD 3,551 (481.2%) million on the trade deficit of USD 738 million of the same month of the previous year. The significant trade deficit in March 2020, which was the result of the fall in exports caused by the coronavirus pandemic, was the main reason behind the deterioration in the current account balance in this month.
For the first quarter of 2020, the current account deficit is USD 7,644 million, an 1,737.5% increase on the figure of USD 416 million for the same period of the previous year.
With regards items of the current account, the Central Bank’s analysis was as follows :
“The current account posted USD 4,923 million deficit in March 2020 in comparison to USD 120 million deficit observed in the same month of 2019, decreasing the 12-month rolling surplus to USD 1,463 million. This development is mainly driven by USD 3,551 million increase in the goods deficit recording net outflow of USD 4,289 million and USD 918 million decrease in the services inflow recording net inflow of USD 735 million, as well as USD 197 million net outflow in secondary income compared to USD 131 million net inflow observed in the same month of the previous year. Gold and energy excluded current account indicated USD 1,160 million deficit, in comparison to USD 3,930 million surplus observed in the same month of the previous year. Travel item under services recorded a net inflow of USD 514 million, decreasing by USD 529 million compared to the same month of the previous year. Investment income under primary income item indicated a net outflow of USD 1,049 million, decreasing by USD 9 million compared to the same month of the previous year.”
With regards the related Financial Account, the Central Bank’s analysis was as follows :
“Direct investment recorded a net inflow of USD 796 million, decreasing by USD 14 million compared to the same month of the previous year. Portfolio investment recorded a net outflow of USD 5,498 million. As regards to sub-items through liabilities, both non-residents’ equity securities and government domestic debt securities transactions recorded USD 1,063 million and USD 2,118 million of net sales, respectively. Regarding the bond issues in international capital markets, other sectors realized net repayments of USD 81 million. Under other investment, banks’ currency and deposits within their foreign correspondent banks and non-resident banks’ deposits held within domestic banks decreased by USD 644 million and USD 2,565 million on net basis, respectively. Regarding the loans provided from abroad, banks, General Government and other sectors realized net repayments of USD 460 million, USD 109 million and USD 3 million, respectively. Official reserves recorded net outflow of USD 16,589 million.”
The Turkish Central Bank has introduced revisions to the way it calculates its balance of payments from the year 2013 and onwards. These revisions have resulted in significant changes to the yearend figures as follows:
Annual Current Account Balances
2013 - deficit (USD 55,858 million)
2014 - deficit (USD 38,848 million)
2015 - deficit (USD 27,314 million)
2016 - deficit (USD 26,849 million)
2017 - deficit (USD 40,584 million)
2018 - deficit (USD 20,745 million)
2019 - surplus USD 8,691 million
On its website on 14.02.2020, the Bank announced that it would be making revisions 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.”
On its website on 10.03.2020, the Bank made the following announcement regarding revisions it has implemented:
“Services item including “International Trade in Services Statistics” (ITSS) initiated to release by Turkish Statistical Institute (Turkstat) has been revised based on administrative records of the Revenue Administration for the period of 2013-2015 and year-2019, and on the results of the ITSS for the period of 2016-2018.
Foreign trade data for 2013-2019 have been revised in line with of Foreign Trade Statistics disseminated by Turkstat based on general trade system. Trade Credit and Advances item under Financial Account has also been revised due to the updates in foreign trade data.
As a result of above mentioned revisions;
Services item increased by USD 9.8 billion in 2013, USD 7.7 billion in 2014, USD 5.4 billion in 2015, USD 4.9 billion in 2016, USD 6.1 billion in 2017, USD 5.3 billion in 2018 and USD 4.7 billion in 2019.
Current account deficit decreased by USD 8.4 billion in 2013, USD 6.1 billion in 2014, USD 5.0 billion in 2015, USD 4.7 billion in 2016, USD 6.0 billion in 2017, USD 7.5 billion in 2018 and current account surplus increased by USD 6.3 billion in 2019.
Net errors and omissions decreased by USD 10.5 billion in 2013, USD 5.3 billion in 2014, USD 3.4 billion in 2015, USD 4.3 billion in 2016, USD 6.6 billion in 2017, USD 10.6 billion in 2018 and USD 7.4 billion in 2019.”