Balance of payments data released on Tuesday in Turkey revealed that, far from narrowing, the country’s current account deficit remains as hefty as ever.
The
deficit was $6.8bn for September, about 80 per cent greater than the
same month a year before, bringing the rolling deficit for the previous
12 months to a new record, at $77.6bn.
This is not the script that was written by the Turkish central bank, which has been confidently predicting in recent months that demand growth would slacken,
so reducing the deficit and so lessening Turkey’s vulnerability to
external shocks. Nor was the sheer size of the deficit the only issue
of concern in the latest figures.
As Ozgur Altug of BGC
Partners in Istanbul notes, there was a net outflow of portfolio funds
of more than $3bn in September, because of a sell-off in the bond
market.
Despite an increase in foreign direct
investment to more than $9bn for the first nine months of the year
(more than double the previous year’s tally), portfolio funds remain a
main source of financing of the deficit. Their recent volatility only
highlights the vulnerability some economists are so worried about.
For more: http://blogs.ft.com/beyond-brics/2011/11/15/turkeys-current-account-deficit-problem/#axzz1e98ODUpy
