Turkey's Current-Account Deficit Narrows at Slower Pace on Oil

  • Impact of cheaper crude prices faded at end of last year
  • 2015 gap was $32.19 billion, down from $43.55 billion in 2014

Turkey’s current-account gap narrowed at a slower pace in December than in the previous two months as the impact of lower oil prices diminished at the end of last year. The lira weakened.

The deficit shrank to $5.07 billion, compared with $6.66 billion a year earlier, a 24 percent annual drop. The median estimate in a Bloomberg survey was for a $5 billion shortfall. The deficit had narrowed at an annual rate of about 59 percent and 84 percent in November and October respectively, the central bank said Thursday.

Last year’s improvement in the current-account, the broadest measure of trade in goods and services, was due to the fall in global energy prices. Turkey imported crude and mineral oils worth $37.8 billion in 2015, down from $54.9 billion a year earlier, according to official data. The narrowing of the deficit slowed in December in step with a smaller annual fall in oil prices, said Inan Demir, Finansbank AS’s chief economist in Istanbul, ranked by Bloomberg as the best current-account gap forecaster.

“After beginning their descent in 2014, oil prices somewhat plateaued early last year and they were not at a dramatically different level in December,” Demir said. “The so-called base impact in energy prices is now becoming less supportive which is the reason why the gap improved at a slower pace.”

The lira weakened after the data and was trading 0.3 percent lower at 2.93 per dollar at 10:05 a.m. in Istanbul.

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