Gold Snaps 10-Month Drop in Turkey’s Current-Account DeficitOnur Ant and Selcan Hacaoglu
Turkey’s current-account deficit expanded from a year earlier in November, halting a 10-month decline as gold imports more than doubled during the period.
The gap in the current account, the broadest measure of trade in goods and services, grew to $5.64 billion from $4.2 billion a year earlier, the central bank in Ankara said in a statement posted on its website today. The median estimate in a Bloomberg survey of economists was $5.4 billion.
The deficit shrank for the first 10 months of last year as a weak lira made Turkish goods more competitive. Exports fell in November for the first time in 2014, hurt by weak demand in key markets Russia and Iraq. A 127 percent rise in gold imports to around $2 billion played a role in expanding the gap in November, according to Levent Durusoy, chief economist at Yatirim Finans Securities in Istanbul.
“The expansion is in part due to the increase in gold imports,” Durusoy said by phone. “We’ll see the current-account gap narrow going forward as the foreign trade deficit has probably started shrinking.”
The lira strengthened after the figures were published and was trading 0.3 percent higher at 2.2792 per dollar at 10:45 a.m. in Istanbul.
Export receipts fell in November as geopolitical tensions slowed shipments to Russia and Iraq which accounted for 12.5 percent of Turkey’s exports in 2013 among themselves, according to a Bloomberg calculation based on official data. Exports fell 7.2 percent from a year ago to $14 billion in November while imports rose 4.6 percent to $20.6 billion, the central bank said. Sales to Russia and Iraq declined by 23 percent and 29 during the same period, respectively, according to another foreign trade report published last month by the state statistics agency.
Unexplained flows of foreign funds, classified as “net errors and omissions” by the central bank, turned from inflows to outflows during the fourth quarter of last year, according to the central bank report. Outflows in November were estimated to be $3.46 billion, the highest since Oct. 1998, according to a Bloomberg assessment based on official data.