Current Account Deficit – Muhasebe News

Turkey’s Current Account Deficit Reduces!

MuhasebeNews — Sat, 13 May 2017 09:08:17 +0000

Current account deficit of Turkey reduces $3.1 billion in March, which means a $666 million fall.

With regard to a report prepared by Turkish Central Bank, the 12-month deficit reduced to 33.02 billion dollars in the first quarter of the year, which is less than 33.75 billion dollars in February.

Turkish Central Bank claimed that “This development in the current account is mainly attributable to a 793 million dollars decrease in the deficit in goods item recording 2.8 billion dollars.”

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Turkey’s Balance of Payments: February 2017

MuhasebeNews — Fri, 05 May 2017 09:09:25 +0000

CURRENT ACCOUNT

The current accountdeficit recorded USD 2,527 million indicating an increase of USD 564 million compared to February of the previous year, bringing the 12-month rolling deficit to USD 33,747 million.
This development in the current account is mainly attributable to USD 546 million increase in the deficit ingoodsitem recording USD 2,491 million. On the other hand, in the same period secondary income net inflows recorded USD 154 million, decreasing by USD 230 million; while the services item net inflows recorded USD 519 million, increasing by USD 200 million.
Travel item, one of the main items under services, recorded a net inflow of USD 502 million increasing by USD 20 million compared to the same month of the previous year.
Investment incomeunder primary income item indicated a net outflow of USD 645 million decreasing by USD 26 million in comparison to February 2016.

FINANCIAL ACCOUNT

Direct investment recorded a net inflow of USD 270 million (increase in net liabilities) decreasing by USD 2 million compared to the same month of the previous year.
Portfolio investmentrecorded a net inflow of USD 907 million. As regards to subitems through liabilities, non-residents’ equity securities and government domestic debt securities transactions recorded net purchases of USD 331 million and USD 179 million, respectively.
Regarding the bond issuesin international capital markets, General Government realized a net repayment of USD 335 million, while banks realized a net borrowing of USD 245 million.
Other investment recorded a net inflowof USD 2,010 million.
Under other investment, banks’currency and deposits within their foreign correspondent banks decreased by USD 1,625 million and nonresident banks’ deposits held within domestic banks increased by USD 936 million on a net basis.
Regarding the loans provided from abroad, General Government andother sectors were net borrowers in the amount of USD 135 million and USD 280 million, respectively while the banks realized a net repayment of USD 256 million.
Official reservesrecorded a net increase of USD 576 million.

Source: Central Bank of the Turkish Republic – February 2017

What are the Factors Affecting Inflation in Turkey?

MuhasebeNews — Tue, 02 May 2017 08:22:20 +0000

1. Data for the fourth quarter of 2016 confirmed the conjecture that the third-quarter economic slowdown was transitory. In this period, the Gross Domestic Product (GDP) expanded by 3.8 percent quarter-on-quarter and 3.5 percent year-on-year. Excluding the offset work day losses of the third quarter, the fourth quarter was marked by a moderate growth. The TURKSTAT’s upward revisions to the first three quarters of 2016 showed that the level of economic activity was much higher than anticipated. Hence, the economy grew by 2.9 percent in 2016, a rate much lower than past years’ averages.

2. Annual growth was driven by domestic demand in the last quarter of 2016. Private spending was up both annually and quarterly thanks to the demand brought forward by automobile tax adjustments, eased macro prudential measures and better financial conditions. Investments, particularly machinery and equipment investments, were relatively weak in this period. With exports accelerating in the last quarter, net external demand provided considerably higher contribution to quarterly growth and a slightly better contribution to annual growth compared to the first nine months of 2016.

3. The first-quarter data for 2017 hint at diminishing recovery in economic activity in the first quarter. Following a robust increase in January, industrial production contracted in February. Rapid depreciation of the Turkish lira at the start of the quarter, uncertainties led by volatile financial markets and the leap in inflation are projected to dampen consumption and investment spending. Although tax incentives stimulate the demand for houses, furniture and home appliances, the recovery in domestic demand fails to spread across all sectors. Indicators for March and April signal for a stronger economic activity and labor market. In brief, the mild recovery in the underlying trend of economic activity continues, which is enhanced by supportive incentives and measures.

4. Despite a partial recovery in domestic demand, net external demand spurs growth with robust increases in exports of goods that spill over into all sectors. The growing demand from the European Union economies, normalizing relations with neighboring countries, the course of the real exchange rate, and Turkey’s market-shifting flexibility abroad continues to stimulate exports. Increases in exports of goods translate into a decelerated deterioration in the current account deficit and improvement in core current account deficit indicators. In addition to the expected partial recovery in tourism, the robust course of exports of goods is expected to contribute positively to the current account.

5. The worsening trend in the labor market that began in May 2016 came to a halt in January 2017. In this period, non-farm employment recorded an uptick particularly with the contribution from the services sector. Meanwhile, leading indicators, such as new job vacancies, the PMI employment index and the expectations for the number of employees in services and construction for March and April suggest a recovery in the employment outlook. Amid the mild rebound in economic activity and the announced employment incentive packages, the partial improvement in unemployment rates is expected to continue.

6. In sum, the recently released data indicate a gradual recovery in the economic activity. Domestic demand conditions display a moderate improvement and demand from the European Union economies continues to contribute positively to exports. With the supportive measures and incentives provided recently, the economic activity is expected to gain further pace in the forthcoming period. However, the course of capital flows in line with uncertainties regarding global economic policies, geopolitical developments, the subsided course of the labor market and the lingering volatility in exchange rates may stand out as factors to limit the pace of growth in 2017.

Source: Central Bank of the Turkish Republic

Growth in Kyrgyzstan projected to slow to 3.0% in 2017 and recover to 3.5% in 2018: ADB

MuhasebeNews — Tue, 18 Apr 2017 11:50:02 +0000

Growth in Kyrgyzstan will slow down in 2017, but will accelerate in 2018, Tazabek reported citing the Asian Development Bank’s (ADB) Asian Development Outlook 2017.

“Growth is projected to slow to 3.0% in 2017 because of a high base in 2016 and an expected decline in output from Kumtor, the main gold mine. It is expected to recover to 3.5% in 2018 with some improvement in the domestic economy and higher growth in the country’s main regional partners, Kazakhstan and the Russian Federation,” the Bank said.

“Strong performance in gold mining and trade overcame an early slump to bring 3.8% expansion in 2016. Currency appreciation and higher remittances curbed inflation and the current account deficit. Growth is projected to slow to 3.0% in 2017 before recovering to 3.5% in 2018 with faster regional growth. Higher inflation and a wider current account deficit are likely. Eurasian Economic Union membership poses both challenges and opportunities,” the Bank said.

Growth slowed marginally to 3.8% in 2016 from 3.9% in 2015 as strong performance in gold mining and trade offset a slowdown in manufacturing, as well as spillover from recession in the Russian Federation and slower growth in Kazakhstan.

Source: akipress.org

US Current Account Deficit Narrows in Fourth Quarter

MuhasebeNews — Sat, 25 Mar 2017 11:00:03 +0000

The U.S. current-account deficit decreased $112.4 billion (3,1 percent decrease) in the fourth quarter of 2016 from $116.0 billion (revised from 113 billion) in the third quarter of 2016, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit decreased to 2.4 percent of current-dollar gross domestic product (GDP) from 2.5 percent in the third quarter. The current-account deficit increased to $481.2 billion (3,9 percent increase) in 2016. The deficit was 2.6 percent of current-dollar GDP in 2016, the same percentage as in 2015. (21.03.2017)