Bloomberg News

Turkish Current Account Gap $4 Billion, Least Since October

October 11, 2011

(Updates with economist’s comment in fourth paragraph.)

Oct. 11 (Bloomberg) -- Turkey’s current-account deficit was $4 billion in August, the smallest gap since October last year as the central bank forecasts that a slowing economy will bring a “rapid” adjustment in the balance of payments.

The shortfall fell from $5.3 billion a month earlier. It expanded to $4 billion from $3.1 billion in the same month a year earlier, the slowest rate of increase this year, the central bank in Ankara said in a statement on its website today. The figure matched the median estimate of $4 billion from seven economists surveyed by Bloomberg.

The current-account deficit makes Turkey dependent on external financing and is the main obstacle to the assignment of an investment-grade rating to the country’s debt, Standard & Poor’s said Sept. 20. The economy is slowing and the weaker lira means the gap has stopped widening, Governor Erdem Basci told executives in Edirne, western Turkey, on Sept. 30.

“Monthly current-account deficit numbers have been moderating noticeably and are likely to continue doing so in the coming months,” Tevfik Aksoy, chief economist for the region at Morgan Stanley & Co. in London, said today in e-mailed comments. “We expect the 12-month rolling deficit to commence a decline starting in November as base effects kick in.”

The cumulative deficit in the 12 months through August widened to $75.1 billion, the bank said. That’s equivalent to about 10 percent of estimated gross domestic product. The gap will end this year at between 9 and 10 percent of GDP, Basci said Sept. 30.

--Editors: Heather Langan, Karl Maier

To contact the reporter on this story: Steve Bryant in Ankara at sbryant5@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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