Growing tourism and exports help ease Turkey’s C/A deficit

ISTANBUL (Reuters) – Better-than-expected tourism receipts and rising exports helped ease Turkey’s current account deficit to $4.034 billion in the first nine months of the year, the central bank said yesterday. The current account deficit had stood at $4.087 billion in the January-to-August period, compared to the government’s year-end forecast of some $7.7 billion. The deficit expanded earlier this year as imports flowed in with the stronger lira. The deficit in the same period of 2002 was just $416 million. «The number of tourists visiting rose by 3.7 percent and the average amount spent increased 7.6 percent over the same period last year,» the central bank said in a statement on its website. «Net tourism revenues increased by 13.3 percent to $5.944 million in the (January-to-September) period.» Exports climbed by 30.4 percent in the first nine months to some $36 million, the bank also said. «It’s a good figure,» said Simon Quijano-Evans at Bank Austria-Creditanstalt. «The better-than-expected tourism receipts over the summer have clearly helped.» Turkey imports almost all of its fuel, and recent lower oil prices should help produce strong data in October, he said. But a decline in the rise in exports could put pressure on the current account in subsequent months, he added. Exports slowing Turkish exporters released unofficial data yesterday showing a 9.9 percent annual rise in exports in November, a significant slowing down from October when their association said exports climbed 36.1 percent. The exporters’ figures may differ slightly from state data, released at a later date. Stronger portfolio investment from abroad could help cushion the impact next year, Quijano-Evans said. Recent lira weakness has helped curb investors’ fears that the current account deficit would swell beyond the government’s year-end expectation. The lira rose to year-highs of around 1.35 million to the dollar in September but has since fallen back after aggressive central bank action, including several interest rate cuts and direct interventions to buy dollars on the currency market. The currency finished at 1.451 million to the dollar on the interbank market yesterday. «The current account began producing a surplus for the first time in August and this tendency continued in September with a surplus of $195 million,» the central bank said.