Turkey's current account deficit on par with expectations

Turkey’s current account deficit on par with expectations

Turkey's current account payments posted a deficit of $3.011 billion in December, bringing the total 2004 deficit to $15.57 billion. Turkey's current account deficit for the past year reached 5.1% of the 2004 projected GNP (Gross National Product). A major contributing factor to the current account deficit was Turkey's widening trade gap. The country's trade balance reported a deficit of $3.01 billion in December. The service sector and net foreign currency inflow partly financed the December deficit; however, factor income items, which reported a shortfall of $509 million, caused a deficit in current accounts. Turkey's foreign trade deficit reached $23.9 billion in 2004, up from $14 billion the year before. Factor income items posted a deficit of $5.6 million last year. The $12.8 billion from service items and $1.1 billion from transfer items provided a $13.9 billion financial to the current account balance. Tourism income played a significant role in service items with $15.9 billion. Economists do not expect a serious problem in the foreign trade balance for the medium-term, assuming the global economy maintains affirmative progress and financial discipline continues. The current account deficit is expected to reach $16 billion in 2005, totaling 4.5% of anticipated GNP.