Turkey’s trade deficit more than doubles in January
Turkey's foreign trade deficit more than doubled in January, led by a surge in imported goods, heightening concern for the sustainability of the nation’s current account deficit.
The deficit increased 109 percent as imports climbed 38 percent from a year ago to $21.5 billion. Exports rose 10.7 percent to $12.5 billion, the statistics office in Ankara said on Wednesday.
Imports of precious metals, including gold, surged 364 percent to $2.4 billion. Imports of oil and other mineral fuels rose to $3.6 billion from $3.2 billion, it said.
Turkey’s current account deficit widened to about 5.6 percent of GDP last year as imports surged, forcing the central bank to dip into its foreign currency reserves in the absence of sufficient foreign investment inflows. The gap has raised concern that the economy is overheating after it grew more than 11 percent annually in the third quarter.
Concern about Turkey’s economy – the lira fell to a record low against the dollar in 2017 – has been exacerbated by political tensions with the United States, possible financial penalties against Turkish banks for breaking U.S. sanctions on Iran and deteriorating relations with the European Union, previously the major source of foreign investment for Turkey’s economy.
The current account deficit is President Recep Tayyip Erdoğan's "Achilles heel" amid ongoing tensions with the United States over Turkey's incursion into Syria's Afrin, Ahval columnist Mark Bentley, Bloomberg's former bureau chief in Turkey, wrote in an op-ed on Feb. 15.