The current account balance in Turkey had a deficit of 3.33 billion USD in March. The current account deficit, announced on a monthly basis, was realized below the market expectations of 3.80 billion USD. The current account balance decreased by 2.12 billion USD from 5.45 billion USD in the monthly period compared to March last year. On an annualized basis, there was a current account deficit of 36.2 billion USD.
The current account balance indicates better figures in March and 1Q21 compared to the previous year. This year, a more favorable annual current account deficit may be realized. Of course, the tendency and weight of the two determining factors will be important here: Tourism and exports. The situation caused by the increase in the number of cases during the pandemic period and the insufficient level of vaccination may pose a downside risk for the tourism season. Although reopening is envisaged after May 17, the decisions of some countries including quarantine measures regarding Turkey may also negatively affect travels. However; domestic expectations are more positive for the tourist season. There will be some improvement in tourism revenues compared to last year, but it will remain below the 2019 normal.
On the financing side, direct investment-driven net inflows were realized as 363 million USD in March, while a net outflow of 5.7 billion USD was observed on the portfolio side. While net sales in equities were 1.03 billion USD, net sales of 915 million USD were made in debt instruments. Official reserves declined by 6.17 billion USD during this period after the replacement of former Central Bank Governor Naci Agbal in March, who promised to support the country’s monetary buffers. In the previous period, the sale of foreign currency by state banks to support TRY caused a decrease in reserves. In the period of March 2021, the current account balance had a deficit of 3.33 billion USD, while net errors and omissions or capital movements of unknown origin showed an inflow of 1.56 billion USD per month. Net errors and omissions in the first 3 months of the year amounted to 6.92 billion USD.
On the other hand; exports are progressing well. Normalization in European countries and the acceleration of growth in this context are effective in this. If economic developments continue in the same way and vaccination increases the degree of improvement, it will positively affect exports. Leading foreign trade data for April showed that this trend continued. On the import side; The decline in gold imports compared to last year and the fact that domestic demand will be limited due to tighter financial conditions will have a lowering effect, while the increase in global energy and raw material prices and the effects of imported consumption goods prices are expected to increase the import bill. When we consider all these factors together; We expect the current account deficit to reach a level of 30 billion USD throughout the year.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
