June 12, 2019 / 2:28 PM / 6 days ago

Turkey's April current account seen $1.5 billion in deficit: Reuters poll

ISTANBUL (Reuters) - Turkey’s current account is expected to show a deficit of $1.5 billion in April, a Reuters poll showed on Wednesday, pushed higher by a fall in the primary income component as the trade deficit remains low.

The current account deficit has narrowed significantly since a currency crisis last year saw the lira fall some 30%, raising import prices and leading to a narrowing in the trade deficit, a major element of the current account balance.

The median estimate of 14 economists showed a deficit of $1.5 billion in April, with the deficit forecasts ranging between $869 million and $1.852 billion.

Turkey’s annual current account deficit, which climbed to $58 billion in May last year, has been one of the main concerns of investors because it makes the economy reliant on speculative inflows to finance the shortfall.

The current account registered deficits of less than $1 billion in the first three months of the year.

Because April is a period of debt servicing, the primary income pushes the deficit higher with the impact of interest payments, said Hilmi Yavas, economist at Yatirim Finansman.

“There is a rise of slightly less than $1 billion here compared to, for example, January and February. The rest of the dynamics are the same,” he said, adding that Turkey could post monthly surpluses in May and June with rising surpluses in the services component.

The foreign trade deficit narrowed 55.6% year-on-year in April to $2.982 billion, according to the Turkish Statistical Institute.

Turkish Finance Minister Berat Albayrak has said he hopes Turkey will post an annual current account surplus in June for the first time since President Tayyip Erdogan’s ruling AK Party came to power nearly 17 years ago.

Twelve economists provided forecasts for the 2019 full-year current account. Their median estimate showed a deficit of $10.35 billion with predictions ranging between a surplus of $2.5 billion and a deficit of $19 billion. The median estimate in a previous poll showed a deficit of $13 billion.

The full-year deficit narrowed to $27.8 billion in 2018 from $47.35 billion the previous year.

The central bank is scheduled to announce April current account data at 0700 GMT on June 14.

Reporting by Ezgi Erkoyun and Ali Kucukgocmen

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