Saturday, October 1

Turkey Current Account Deficit Widens More Than Expected in July

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(Bloomberg) —

Turkey’s current account deficit widened more than expected, driven by higher energy prices.

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The gap was $4.01 billion in July, widening $3.70 billion from a year earlier, the central bank said on its website on Monday. The median estimate in a Bloomberg survey of nine analysts was for a $3.70 billion shortfall in July.

Key insights

  • The shortfall in trade of goods was $9.31 billion in July
  • Services posted a surplus of $5.78 billion, driven by a surge in tourism revenue
  • Net portfolio outflows were $631 million, while inflows from foreign direct investments were $252 million
  • Net errors and omissions, or capital movements of unknown origin, showed monthly inflows of $5.47 billion, bringing inflows during the January-July period to around $24.4 billion
  • Official reserves rose by $4.42 billion

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  • Turkey’s central bank will hold its next rate-setting meeting on Sept. 22. The monetary authority lowered its rate by 100 basis points to 13% last month, despite inflation running at a 24-year high of 80%
  • Turkey’s current-account deficit is expected to reach 5.9% of its GDP this year, fueled by an estimated trade deficit of $105 billion due to a rally in energy prices

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