Turkey's current deficit on par with expectations

Turkey’s current deficit on par with expectations

Turkey's current account deficit rose 44% year on year to $2.46 billion in April. The deficit was in line with market expectations. For the January-April 2005 period, the current account deficit totaled $7.09 billion. The 12-month current account deficit reached $17.34 billion. A major contributing factor to the current account deficit was Turkey's widening trade gap. The country's trade balance reported a deficit of $2.58 billion in April. The service sector and net foreign currency inflows partly financed the April deficit; however, factor income items, which reported a shortfall of $596 million, caused a deficit in the current account. Economists do not expect a serious problem in the foreign trade balance for the short-term; however, the slowdown in the global economy, particularly the Euro zone's economy, intensified competition, widespread safeguard measures, financial imbalance and oil prices create risk for the foreign trade balance in the long-term. The current account deficit is expected to reach $16.5 billion in 2005, totaling 4.6% of anticipated GNP.