Bloomberg News

Turkish Current Account Gap Widens More Than Expected on Imports

November 13, 2013

Turkey’s current-account deficit widened more than expected in September as imports rose, the Ankara-based central bank said today.

The current-account gap of $3.3 billion exceeded the $2.6 billion median estimate in a Bloomberg survey of 10 economists. Imports climbed to $20 billion from $19.3 billion a year ago, while exports were little changed at $14 billion.

The current-account deficit, which Prime Minister Recep Tayyip Erdogan’s government says is the economy’s biggest vulnerability, has climbed about 28 percent in the first nine months of the year from a year ago. Turkey cut gold exports to neighboring Iran this year to abide by international sanctions over the Persian Gulf nation’s nuclear program, while imports of the precious metal soared, widening the trade imbalance.

“The reversal in gold trade, from exports last year to this year’s imports, is behind the widening in the trade gap,” Inanc Sozer, an economist at Odeabank AS in Istanbul, said by e-mail yesterday.

The government lowered its year-end forecast for the current-account gap to 7.1 percent of gross domestic product on Oct. 8, from 7.5 percent a year earlier, as it revised down its prediction for GDP growth to 3.6 percent from 4 percent.

Turkey was a net importer of $7.1 billion of gold, jewelry and precious metals in the first nine months of this year, compared with net exports of $5.5 billion during the same period in 2012. The change reflects tougher sanctions, Economy Minister Zafer Caglayan said on Aug. 17.

Unknown Origins

The central bank reported about $1.7 billion in capital inflows classified as coming from an unknown origin, the so-called “net errors and omissions.” In July, the inflows stood at $4.9 billion, the most since at least 2008.

Finance Minister Mehmet Simsek said on Oct. 8 that the unexplained inflows may be result of a miscalculation of tourism income or of cash believed to be hidden “under mattresses,” according to Hurriyet newspaper.

The lira weakened 0.1 percent to 2.0570 per dollar at 10:20 a.m. in Istanbul. The currency has depreciated 12.1 percent this year, the second-worst performance among emerging-market currencies in Europe, Africa and the Middle East, after South Africa’s rand, according to data compiled by Bloomberg. The yield on two-year lira notes increased 8 basis points, or 0.08 percentage point, to 8.89 percent.

To contact the reporter on this story: Onur Ant in Ankara at oant@bloomberg.net

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


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