ISTANBUL (Reuters) – Turkey’s current account is expected to record a relatively small deficit of $570 million in July due largely to a partial recovery in tourism revenues, a Reuters poll showed on Tuesday.
For the full year, the median estimate of 11 economists was a $20 billion deficit, with responses ranging from $18 billion to $25 billion.
Turkey’s import-reliant economy, worth $717 billion in 2020, has been prone to big trade deficits and a boom-bust growth cycle that was exacerbated by the pandemic.
The current account recorded a deficit of $36.72 billion in 2020 due mostly to a sharp rise in the trade deficit and plunging tourism revenues due to coronavirus fallout.
The median estimate in the Reuters poll showed a deficit of $570 million in July, with estimates ranging between a deficit of $1 billion and a surplus of $39 million.
A major component of the current account, the trade deficit widened 51.3% year-on-year to $4.28 billion in July, according to the Turkish Statistical Institute.
An uptick in tourism revenue from last year, as well as exports are expected to narrow the deficit in 2021 as a whole compared to last year.
Last month, the central bank revised four data points, including trade credits and short-term external debt stock, which is also expected to impact the deficit for the full year.
For 2021 as a whole, the $20-billion forecast was lower than a government estimate of $21 billion released on Sunday as part of its medium-term projections, which also predicted it would drop to $18.6 billion next year.
Central Bank Governor Sahap Kavcioglu said in July that Turkey would record a current account surplus for the rest of the year.
Turkey’s 12-month current account ended 2019 in surplus for the first time since 2001, though the monthly reading dipped back towards the end of the year as the economy recovered from a recession brought on by a 2018 currency crisis.
The central bank is scheduled to announce July current account data at 0700 GMT on Sept. 13.
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