Turkish Current-Account Gap Widens More Than Expected

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Turkey’s current-account deficit widened more than expected in September as imports rose and services income was revised, the Ankara-based central bank said today.

The current-account gap of $3.3 billion exceeded the $2.7 billion median estimate in a Bloomberg survey of 10 economists. Imports climbed to $20 billion from $19.3 billion a year ago, while exports were little changed at $14 billion. Services income for this year was also revised down after the state statistics agency changed its method for calculating tourism revenue.

The current-account deficit, which Prime Minister Recep Tayyip Erdogan’s government says is the economy’s biggest vulnerability, has surged about 28 percent in the first nine months of the year from a year ago. Turkey cut gold exports to neighboring Iran this year to abide by international sanctions over the Persian Gulf nation’s nuclear program, while imports of the precious metal soared, widening the trade imbalance.

“The reversal in gold trade, from exports last year to this year’s imports, is behind the widening in the trade gap,” Inanc Sozer, an economist at Odeabank AS in Istanbul, said by e-mail yesterday.

Gap Forecast Lowered

The government lowered its year-end forecast for the current-account gap to 7.1 percent of gross domestic product on Oct. 8, from 7.5 percent a year earlier, as it revised down its prediction for GDP growth to 3.6 percent from 4 percent.

Turkey was a net importer of $7.1 billion of gold, jewelry and precious metals in the first nine months of this year, compared with net exports of $5.5 billion during the same period in 2012. The change reflects tougher sanctions, Economy Minister Zafer Caglayan said on Aug. 17.

The central bank revised down services income for seven of the first eight months of the year after Turkstat, the statistics agency, stopped including Syrian refugees when calculating tourism income. Turkey hosts an estimated 600,000 Syrians who have fled their country’s civil war, officials say.

The central bank reported about $1.7 billion in capital inflows classified as coming from an unknown origin, so-called “net errors and omissions.” It revised inflows in August to $3.1 billion from $2.9 billion.

Unexplained Inflows

Finance Minister Mehmet Simsek said on Oct. 8 that the unexplained inflows may be the result of miscalculated tourism income or money hidden “under mattresses,” according to the Hurriyet newspaper.

The lira was little changed at 2.0539 per dollar at 12:44 p.m. in Istanbul. The currency has depreciated 13.2 percent this year, the second-worst performance among emerging-market currencies in Europe, Africa and the Middle East, after South Africa’s rand, according to data compiled by Bloomberg. Yields on two-year lira notes fell by six basis points, or 0.06 percentage point, to 8.83 percent at 11:56 a.m. in Istanbul.