Turkey's current account deficit on the rise

Turkey’s current account deficit on the rise

Turkey's current account deficit rose 77.9 percent year on year to $2.37 billion in May. The deficit was in line with market expectations. For the January-May 2005 period, the current account deficit totaled $11.12 billion. The past 12 months' current account deficit reached $18.24 billion. A major contributing factor to the current account deficit was again Turkey's widening trade gap. The country's trade balance reported a deficit of $3.12 billion in June. The service sector and net foreign currency inflows partly financed the May deficit; however, factor income items, which posted a shortfall of $608 million, caused a deficit in the current account. Turkey's macro-economic recovery and the reinforcement of global economy on developing countries show that the balance of payments' risks will maintain a more controlled track. On the other hand, economists expect current account deficit to reach $20 billion at the end of the year on the back of current exchange level and rising trade deficit. The government also revised upward its current account deficit forecast to $15.5 billion.