Crucial gap widens on energy costs
Posted by meb at May 12th, 2008
Turkey’s current-account deficit widened in March, driven by higher prices for imports of fuel and raw materials.
The gap expanded to $4.2 billion from $3 billion in March 2007, the Central Bank said on its Web site Friday. The deficit was forecast at $3.9 billion, according to the median estimate of 14 economists in a Bloomberg e-mail survey.
Turkey imports nearly all of its energy and rising global oil prices may push the cumulative current-account deficit to a record $50 billion at the end of this year, Economy Minister Mehmet Şimsek said on April 29. Standard & Poor’s cited concern for Turkey’s ability to finance the gap when it downgraded the country’s credit outlook to negative from stable in April.
“Energy costs are pushing up the trade deficit, unfortunately we have nothing to balance it with,” said Şengül Dağdeviren, economist for Oyakbank. “With foreign investment falling off, the quality of the financing is declining too.”
The deficit in the 12 months to March reached $40.4 billion, compared with $37.6 billion at the end of 2007. The deficit last year was equivalent to about 5.7 percent of gross domestic product.
Crude oil prices rose to about $104 a barrel in March from $66 a year earlier.
The country drew $2.4 billion in foreign direct investment in the month, mainly through sales of stakes in Türkiye Finans Katılım Bankası and AXA Oyak Holding, the Central Bank said. Foreign investment in the first three months was $4.4 billion, compared with $9.4 billion in the same period a year earlier.
Portfolio investors withdrew $1.7 billion from the country in the month while banks and companies borrowed $4.6 billion.
source: Bloomberg via Turkish Daily News
Related posts: