Turkey sees jump in current account deficit next year

ANKARA (Reuters) – Turkey is expected to post a current account deficit of $39.246 billion in 2008, up from $36.388 billion this year, the State Planning Organization said in a report obtained by Reuters yesterday. The current account deficit is a major weak spot of the Turkish economy, which has grown strongly amid sharply falling inflation in recent years, supported by multibillion-dollar International Monetary Fund loans. At the start of this year, the government had forecast a 2007 current account deficit of $30.432 billion. As a ratio of gross domestic product (GDP), the current account deficit was seen rising to 7.5 percent next year from 7.4 percent in 2007. The report said the budget primary surplus, according to IMF definitions, was expected to rise to 31.982 billion lira ($26.3 billion), or 4.5 percent of GDP in 2008, from 21.283 billion lira or 3.3 percent of GDP this year. The primary surplus is a budget measure excluding interest payments on Turkey’s large public debt stock. The official planning report also said net tourism revenues were seen as rising to $16.2 billion in 2008 from $15.4 billion this year. Privatization revenues were forecast to rise to 11.798 billion lira ($9.7 billion) in 2008 from 11.581 billion this year. The IMF said in a report on Tuesday Turkey’s economic outlook was bright with growth mounting and inflation heading down. It said fiscal performance weakened considerably in 2007, making the economy more vulnerable and disinflation more reliant on tight monetary policy. The IMF mission to Turkey is undertaking its seventh review of the country’s standby arrangement following discussions in Ankara earlier this month and on the sidelines of the IMF annual meeting in recent days.