The Turkish Central Bank recorded the current account deficit for April 2019 as USD 1,334 million, a fall of 76.2% compared with the deficit of USD 5,597 million for the same month of the previous year.
The Central Bank showed exports as USD 15,374 million and imports at USD 17,218 million in April 2019, giving a trade deficit of USD 1,844 million, an improvement of USD 3,656 million on the trade deficit of USD 5,500 million of the same month of the previous year. Turkey’s current account deficit stood at USD 27,125 million for the year 2018, compared to USD 47,347 million for 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 3,656 million decrease in the goods deficit recording net outflow of USD 1,844 million, USD 263 million decrease in primary income deficit to USD 1,243 million as well as USD 401 million increase in services surplus to USD 1,738 million. Gold and energy excluded current account indicated USD 2,347 million surplus, in contrast to USD 1,589 million deficit observed in the same month of the previous year. Travel item under services recorded a net inflow of USD 1,158 million, increasing by USD 144 million compared to the same month of the previous year. Investment income under primary income item indicated a net outflow of USD 1,149 million decreasing by USD 282 million in comparison to the same period the previous year. Secondary income recorded net inflow of USD 15 million decreasing by USD 57 million in comparison 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 USD 578 million decreasing by USD 140 million compared to the same month of the previous year. Portfolio investment recorded a net outflow of USD 4,519 million. As regards to sub-items through liabilities, non-residents’ equity securities transactions and government domestic debt securities transactions recorded net sales of USD 78 million and USD 662 million, respectively. Regarding the bond issues in international capital markets, banks realized net borrowing of USD 568 million, while General Government and other sectors realized net repayments of USD 1,405 million and USD 511 million, respectively. Other investment recorded a net outflow of USD 1,281 million. Under other investment, banks’ currency and deposits within their foreign correspondent banks and nonresident banks’ deposits held within domestic banks net increased by USD 3,056 million and USD 1,492 million, respectively. Regarding the loans provided from abroad, other sectors realized net borrowing of USD 157 million, while banks and General Government realized net repayments of USD 833 million and USD 72 million, respectively. Official reserves recorded net outflow of USD 2,805 million.”
The lower current account deficit in April 2019 continues to reflect the dramatic fall in imports following the currency crisis in the Summer of 2018 and the deepening economic crisis. In the short-term, as imports continue to remain depressed and exports remain relatively strong despite falls in investment, stocks, imported material input, and rising costs of production, the current account deficit is likely to remain minimal. However, in the medium to long-term, the deepening economic crisis is likely to depress economic activity and adversely affect the country’s balance of payments.
The current account figures over the eleven months up to and including April 2019 are given below. We can see that the 12 month rolling deficit has gradually fallen from USD 57,098 million in June 2018 to USD 8,634 million in April 2019.
USD in millions
Month Monthly balance 12 month rolling figure
June 2018 (3,008) (57,086)
July 2018 (2,205) (54,601)
August 2018 2,028 (51,669)
September 2018 1,869 (45,376)
October 2018 2,630 (38,907)
November 2018 1,051 (33,369)
December 2018 (1,506) (27,125)
January 2019 (637) (20,767)
February 2019 (747) (17,018)
March 2019 (613) (12,897)
April 2019 (1,334) (8,634)