Turkey’s January current account balance
Turkey's current account deficit rose 73% year-on-year to $1.64 billion in January 2005. The January figure, however, is actually 45% lower than that of December 2004. The 12-month current account deficit, which totaled $16.1 billion, reached 5% of 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 $1.65 billion in January. The service sector and net foreign currency inflows partly financed the January deficit; however, factor income items, which reported a shortfall of $491 million, caused a deficit in the current account.
Short-term capital entries continued to support the capital account in January, while portfolio investment entries totaled $3.2 million.
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 billion in 2005, totaling 4.5% of anticipated GNP.