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Decline in Current Deficit Pleases Economy Management

Economy management had focused its works on current deficit for some time. According to the information compiled from the data of the “Central Bank of the Turkish Republic” (TCMB), current account deficit has declined to 2 billion 227 million dollar with a decrease of 216 million dollar in January since the same month of last year. The twelve-month current account deficit, on the other hand, declined from 32 billion 105 million dollar to 31 billion 889 million dollar, to the lowest level since August 2010

While decrease in the foreign trade deficit compared to the same month of last year was the main factor in the limited improvement in current deficit observed in January, lower deficit in the primary income balance from the last year’s also contributed. However, lower surplus in services balance than last year limited this improvement.

Analysts state that the base effect of the limited improvement in the current deficit may continue with an expectation for continuation of downtrend in energy prices.  Analysts, who state that especially with improvements in the EU economy and lift of sanctions on Iran, an increase in exports to the said regions might reflect positively on current deficit, indicate that also global economic developments and geopolitical risks should be followed.

“Current deficit may decline to 27 billion dollar”

Economists made evaluations on the issue and reported that although the decline in annual current deficit slowed down in the first month of this year, they expect it will gain momentum again especially in the first half of the year.

“The EU and Iran market will be positive factors”

Turkish economists state that with the base effect of exports to the EU market in 2016 and with the lifting of sanctions on Iran, there may be buoyancy in these markets, and envisage a higher current deficit than last year in 2016. Economists also add that risks on this estimate appear to be downside at the moment.

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