Does Turkey's current account cause a crisis?

Does Turkey’s current account cause a crisis?

Turkey's Central Bank (TCMB) disclosed that the country's current account balance reports $540 million deficit in September, representing the lowest deficit since the beginning of the year. For the January-September 2005 period, the current account deficit totaled $16.35 billion. The past 12 months' current account deficit reached $21.4 billion. A major contributing factor to the current account deficit was once again Turkey's widening trade gap. The trade balance in September reported a deficit of $2.7 billion. The service sector and net foreign currency inflows partly financed the September deficit; however, factor income items caused a deficit in the current account. Long-term capital inputs, which gained momentum, indicated a positive sign for the current account balance. In addition, an even more promising factor is the rise in foreign investments. Economists expect the current account deficit to reach $22.5 billion by the end of the year, accounting for about 6.3 percent of the country's gross domestic product. Following the current account report, Professor Steve Hanke, who is one of the significant 25 economists of the world, indicates that Turkey's account deficit is considerably high and this can cause a crisis. He also added that the present current account outlook reflects the situation before 1994 and 2001 attacks. In response to Hanke's statement, World Bank Turkey Representative Andrew Vorkink said that there will be no crisis as past years. Vorkink added that the significant risks in the markets will be eliminated by banking law. Furthermore, he states that the fluctuating exchange rate and direct foreign capital amount will contribute to a decline in current account deficit.