November 12, 2019 / 10:28 AM / a month ago

Turkish current account surplus higher than expected in September

ISTANBUL, Nov 12 (Reuters) - Turkey’s current account recorded a higher-than-expected surplus of $2.48 billion in September, data from the central bank showed on Tuesday, with support from tourism revenues and a relatively low trade deficit.

The 12-month rolling current account balance, which reached a deficit of $58 billion in May 2018, has dropped dramatically since a currency crisis last year saw the price of imports rise.

The current account balance has been one of the main concerns of investors because a large deficit makes the economy reliant on foreign speculative inflow of funds to finance the shortfall.

The 12-month balance turned to surplus in June for the first time in nearly 17 years and has remained positive since but is expected to reverse course as the economy continues to recover.

The annual current account recorded a surplus of $5.9 billion in September. The median estimate in a Reuters poll last week for the annual current account at the end of 2019 stood at a surplus of $100 million.

Ankara forecast the annual current account to show a surplus of $1 billion in 2019, compared to a deficit of $27.6 billion in the previous year.

Enver Erkan, economist at Tera Investment, said the current account surplus is expected to decline and turn to a deficit in coming months.

“After October, (the positive impact from tourism revenue) goes away and, in addition to that, recovery in the economy and growth becoming palpable, domestic demand picking up will have an impact on us posting a deficit in the current account balance again,” he said in a note.

Turkey’s trade deficit, the largest components of the current account, more than tripled from a year ago to stand at $1.77 billion in October, data from the Trade Ministry showed. (Reporting by Ali Kucukgocmen and Behiye Selin Taner Editing by Dominic Evans)

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