Israel Matzav

Turkey's current account deficit expands by 65%

Spengler's predictions for the Turkish economy are quickly coming true.

Turkey’s 2011 current account deficit increased by a substantial 65.3 percent from 2010 reaching $77.8 billion, an approximately $30.5 billion increase from the $46.6 billion last year . Meanwhile, December’s current account deficit registered at roughly $6.6 billion.

The main reason behind the substantial current account gap was the large increase in the foreign trade deficit, a $33 million increase to $89.4 million, according to the central bank data.

“The current account deficit is still close to 10 percent of gross domestic product (GDP) […] but with the expected slowdown in the economy in 2012, we expect to see a slight narrowing in the deficit,” said Oyak Investment’s economists Mehmet Besimoğlu and Gülay Girgin in a written note. They predict the current account deficit to narrow to $55 billion, roughly 7.5 percent of GDP in 2012.

According to central bank data, there was also a $567 million year on year increase in the exodus of foreign direct investment and portfolio investments from Turkey.

The article goes on to note that Turkey is running a deficit in trade with the European Union which more than wipes out its surplus with Islamic countries. Hmmm.

Labels: Turkish economy

posted by Carl in Jerusalem @ 5:47 PM