MENA Observatory – Turkey
The Turkish Central Bank announced today, Friday, that the current account balance recorded a deficit less than expected of $ 1.82 billion in July, mainly due to the high cost of imports and a sharp decline in tourism due to the Corona virus.
The deficit in the first seven months of the year recorded $ 21.63 billion and is expected to rise further in the coming months despite the slowing pace of increase, while the deficit is expected to reach $ 26.5 billion by the end of this year.
This comes at a time when the pound is touching record low levels and the Central Bank is depleting its foreign exchange reserves. The central bank said the trade deficit amounted to $ 1.85 billion, while the balance of services, which includes tourism, recorded net income of $ 288 million, down from $ 4.6 billion in July 2019.
Another decline in tourism due to a possible second wave of the Corona virus threatens to further deteriorate the current account balance, while Turkey’s current account balance in 12 months ended last year with a surplus for the first time since 2001, although the monthly reading decreased again late last year as the economy recovered. From a recession caused by a currency crisis in 2018. It is expected that the measures taken to curb the spread of Covid-19 will lead to the contraction of the economy in 2020.