ISTANBUL: Turkey's trade deficit widened 26 percent year-on-year in October to $7.98 billion, data showed on Wednesday, less than a forecast deficit of $8.3, trade deficit rose 63.5 percent to $90.18 billion from $55.17 billion in the same period of last year. The pace of yearly growth of Turkish imports declined to 15.1 percent from its peak of 48.7 percent in February while the pace of yearly growth of Turkish exports stood at 8.9 percent from its peak of 32 percent in August.
Ash said the reduced export growth suggested Turkey was beginning to feel the heat from Europe's economic slowdown, though its experts were more diversified, compared to the rest of Emerging Europe.
The trade deficit is the main factor behind a Turkish current account deficit that the International Monetary Fund expects to stand at 10.5 percent of GDP by the end of 2011.
In December last year, the central bank adopted a strategy of lower interest rates to deter "hot money" inflows, and higher reserve requirement ratios to curb loan growth.
It has said this would rein in the current account deficit from the fourth quarter.
The central bank strategy has been widely criticised by analysts who fear it is letting inflationary pressure build up.
Last month the bank started monetary tightening in order to stop further lira depreciation.
At its monthly meeting on Oct. 20, the bank left its policy rate unchanged but raised its overnight lending rate as it sought to prevent significantly higher inflation hitting the medium-term outlook.
On a seasonally and calender adjusted basis, Turkish imports declined 5.4 percent to $19.81 billion while exports rose 2.2 percent to $11.16 billion.
"In order to smooth out the factors, one needs to look at the moving average seasonally adjusted data. When we do that, we see that the deficit has fallen to $8.6 billion, about 7 percent lower than where it was in summer, implying that a correction in external balances is already underway," wrote Yarkin Cebeci, economist at JP Morgan.
"We expect investor confidence to improve as the adjustment in the current account deficit becomes evident. However, even after this adjustment, the current account deficit will remain wide and Turkey will remain dependent on capital inflows to finance this deficit, meaning that the country will remain vulnerable to shifts in global risk appetite and in global liquidity conditions," he added.
Copyright Reuters, 2011
Last modified onSaturday, 06 May 2017 10:07
Latest from Admin TOA
- Massive Security Operation Underway to Protect the 73rd Session of UNGA
- New York Turkish Apparel Center (TAC) Is Aspiring to Be The New Marketplace for U.S. Buyer
- Aziz Sancar's New Turkish Community Center Aims to Bring Turkish Culture to America
- Chobani CEO Hamdi Ulukaya Considers Going Public
- Dr. Oz Recounts His Visits to Syrian Refugee Camps