Turkey posts current account surplus for fourth month

(Updates story with economist comment in the fourth paragraph.)

Turkey reported an annual current account surplus for a fourth-straight month in September after a currency crisis in August last year curbed demand for imported goods and services and boosted exports.

The 12-month surplus increased to $5.9 billion, the central bank said on its website on Tuesday, equivalent to 0.8 percent of reported annual economic output of $722 billion. The surplus for September alone was $2.5 billion, beating all economists’ forecasts in a Reuters survey, which predicted a surplus of $2 billion.

Turkey’s current account is posting an annual surplus for the first time in more than a decade and a half. The country had reported a deficit of almost $60 billion, or 6.5 percent of economic output, prior to the currency crisis. The turmoil slashed the spending power that Turks used to buy imported goods such as cars, television sets and mobile phones.

"September data shows a continued correction in external imbalances though we will likely witness a gradual reversal in the period ahead," Muhammet Mercan, chief economist for ING Bank in Turkey, said in a report. "Turkey’s total financing needs remain high and sentiment is somewhat fragile as indicated by the weak capital flow outlook in recent months, despite a supportive shift in the global backdrop."

Both imports and exports of goods rose during the month. Exports climbed 2.5 percent to $15.4 billion, while imports increased by 2.1 percent to $16.3 billion, the figures showed.

The central bank said growth of $694 million in the surplus for services during September, which recorded a net inflow of $4.3 billion, also helped the economy post an overall surplus.

The current account surplus, excluding gold and energy, was $5.8 billion, an increase of $670 million compared with September 2018, the central bank said.  

Turkey’s latest economic programme, unveiled in September, predicts a current account surplus of 0.1 percent of economic output this year.

The surplus has helped steady the lira, which lost almost 30 percent of its value last year, because the country previously relied on speculative flows of capital to balance its books. The lira was little changed at 5.77 per dollar in Istanbul on Tuesday. Losses this year total about 8 percent.