ISTANBUL (Reuters) – Turkey’s current account is expected to have recorded a surplus of $2 billion in September, a Reuters poll showed on Friday, as the trade deficit remains relatively low and tourism income continues to provide support.
Turkey’s annual current account deficit, which climbed to $58 billion in May 2018, has dropped dramatically following a currency crisis that saw the lira lose nearly 30% of its value against the dollar last year.
The 12-month cumulative current account swung to a surplus in June for the first time in nearly 17 years and has remained positive since.
The median estimate in the Reuters poll of 12 economists for September’s monthly current account balance stood at a surplus of $2 billion with forecasts ranging between surpluses of $1.8 billion and $2.4 billion.
Turkey has long had a large current account deficit, which was a key concern for investors because it leaves the economy reliant on speculative inflow of funds to finance the shortfall.
Economic activity slowed substantially in the wake of the lira crisis, while the cost of imports surged. The economy has since showed signs of recovery.
The current account will show a surplus in September due to a relatively low trade deficit and continued support from tourism revenues, albeit lower than in the peak tourism months, said Hilmi Yavas, economist at Yatirim Finans.
“On the other hand, we expect an acceleration in imports in the remaining months of the year and tourism income will slow. So, we will probably record a surplus in October as well but it is possible that we will post a deficit again in November,” he said, adding that the deficit could widen sharply in December.
He said the 12-month cumulative surplus had likely peaked in August, when it stood at slightly above $5 billion, and would probably remain around the same level in September but start to decline in October.
The median estimate of 11 economists who participated in the Reuters poll was for a surplus of $100 million for the current account balance for the whole of 2019. Estimates ranged between a deficit of $3.7 billion and a surplus of $9.8 billion.
Turkey’s foreign trade deficit, the largest component of the current account, rose 6.6% year-on-year in September to $2.056 billion, official data shows.
Turkey’s central bank is expected to announce the September current account data at 0700 GMT on Nov. 12.
Reporting by Ali Kucukgocmen; Editing by Frances Kerry
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