Turkish Current-Account Deficit Shrinks as Recession Takes Hold

(Bloomberg) -- Turkey’s current-account gap in January narrowed to around a tenth of the deficit seen a year earlier, as the economy continues to contract after last year’s currency crash and weak consumer demand curbs imports.

The measure -- the broadest gauge of trade and investment -- recorded a deficit of $813 million in January, the central bank said on Monday. The median of 13 forecasts in a Bloomberg survey was for a gap of $650 million. All economists in the poll expected a deficit.

Key Insights

• The 12-month rolling gap fell to $21.6 billion from $27.8 billion in December and down from a peak of $58.1 billion in May. It shrank because the period now excludes January 2018, when Turkey’s current-account shortfall widened to last year’s record of $7 billion.
• Official reserves rose by $3.5 billion as the monetary authority tries to rebuild its foreign-currency coffers.
• The banking system posted a net loan outflow for a ninth month, which was at $2.2 billion in January, indicating continued weak demand for credit.

Get More

• The balance of goods and services posted a deficit of $296 million, compared to a gap of $6.8 billion a year earlier
• Net errors and omissions, or capital movement of unknown origin, showed a monthly outflow of $1.8 billion, after total inflows of $21.2 billion in 2018.

--With assistance from Harumi Ichikura.

To contact the reporter on this story: Cagan Koc in Istanbul at ckoc2@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, ;Lin Noueihed at lnoueihed@bloomberg.net, Paul Abelsky

©2019 Bloomberg L.P.