Turkey's current account deficit seen at $4.6 billion in August - Reuters poll

ISTANBUL (Reuters) - Turkey’s current account is expected to record a deficit of $4.6 billion in August, when the trade deficit surged, a Reuters poll showed on Thursday, as a sharp downturn in tourism contributed to widening estimates for the year-end deficit.

FILE PHOTO: Bussiness and financial district of Levent, which comprises banks' headquarters and popular shopping malls, is pictured in Istanbul, Turkey, July 9, 2019. REUTERS/Murad Sezer

In the poll of 12 economists, forecasts for August ranged between deficits of $1.5 billion and $4.9 billion.

Turkey’s foreign trade deficit, the main component of the current account, leapt 168.2% year-on-year in August to $6.278 billion under the general trade system, according to the Turkish Statistical Institute.

Exports fell 5.7% and imports jumped 20.4% compared with August 2019.

For the whole year, the median poll response of 10 economists was for a deficit of $33 billion, compared to $26.50 billion in last month’s survey, with forecasts ranging between $31 billion and $40.3 billion.

Turkey’s long history of current account deficits - which topped $52 billion in 2018 - are again worrying investors as the lira touches record lows and the central bank eats into its foreign exchange reserves.

Finance Minister Berat Albayrak said last month that Ankara expects a deficit of $24.4 billion, or 3.5% of GDP this year. He said that without the downturn in tourism and surging demand for gold, Turkey would have posted a surplus of $12.4 billion.

Turkey’s 12-month current account ended last year in surplus for the first time since 2001, though the monthly reading dipped back late last year as the economy recovered from a recession brought on by a 2018 currency crisis.

Measures taken to curb the COVID-19 outbreak are expected to shrink the economy in 2020. The lira has fallen 25% this year as worries grow over the central bank’s depleted forex reserves. Recent geopolitical concerns have exacerbated its decline.

The central bank is scheduled to announce the August current account data at 0700 GMT on Oct. 12.

Reporting by Ali Kucukgocmenl; Editing by Daren Butler