Posted by meb at March 3rd, 2008

Turkey’s trade deficit widened in January from a year earlier, the ninth consecutive expansion, as higher oil prices and a revival in domestic demand pushed up the import bill.

The gap grew to $5.7 billion from $4 billion in the year-earlier period, the statistics agency in Ankara said on its Web site Friday.

The wider January gap follows last year’s largest-ever current-account deficit and threatens to undermine the YTL. Turkey imports almost all of its energy needs and industry is also dependent on raw materials from abroad.

“There’s no sign of a decline in imports,” said Levent Durusoy, chief economist at Yatırım Finansman Securities in Istanbul. “As the year goes on we may see the pace of the increase slow but it won’t stop.”   The trade deficit ended last year at $62.8 billion, compared with $54 billion in 2006.

Exports rose 61 percent to $10.6 billion in January, the statistics agency said. Imports increased 54 percent to $16.3 billion in January from the year-earlier period, the agency said.

The central bank began cutting its benchmark interest rate in September and has since reduced the cost of borrowing by 2.25 percentage points to 15.25 percent. The resulting increase in domestic demand will be tamed by a global slowdown caused by turmoil on credit markets, the bank said on Feb. 26.

Crude oil prices rose to about $92 a barrel in January from $58 a year earlier.

The current-account gap, the broadest measure of trade in goods and services, widened 18 percent to a record $38 billion in 2007. The gap was about 7.8 percent of economic output.

Source: Turkish Daily News