Turkey's July current account deficit is $703 million

Turkey’s July current account deficit is $703 million

Turkey's balance of payments on current accounts posted a deficit of $703 million in July. This brought the current account deficit to $10 billion in the January-July 2004 period, up by 88% compared to the same period of last year. At the same time, 12-month deficit reached $11.5 billion. On the other hand, the first half current account deficit was revised down by $600 million. In July, imports surged by 36% to $8 billion from $5.9 billion recorded in July 2003 while exports reached $5.7 billion with an increase of 33%. Tourism revenues amounted to $7.1 billion in the first seven months, up by 35.8% year-on-year, easing pressure on the current account. In contrary to previous months, it is seen that the current account deficit is financed mainly through Central Bank reserves and capital inflows. Meanwhile, IMF pointed out that fluctuating exchange rate regime, which is also used by Turkey, is the optimum precaution against the economic shock that could be derived from current account deficit. Countries, which have inflexible exchange rate regime, may go through a crisis because of the increase in current account deficit, IMF said. Separately, Turkish steel producer Isdemir targets to increase its flat steel production to 5 million tons by 2007 and to 12 million tons by 2013. Ahmet Erhan, member of the Executive Board of Erdemir and İsdemir, stated that this situation will help Turkey reduce its current account deficit as flat steel imports will decrease. Flat steel consumption amounts to 6.8 million tons in Turkey each year. This figure's 3.5 million tons is met by production and 3.3 million tons by imports. It is also reported that if other sectors, which focus on imports, take the necessary measures, there will be a significant decline in current account deficit.