Turkey has posted its first current account surplus in three years as imports slumped during a severe economic downturn, the Ahval news website reported.
The surplus was $2.59 billion in August compared to a deficit of $923 million 12 months earlier, the central bank said in a statement on its website on Thursday. Imports slid to $14.4 billion from $19.4 billion, while exports fell to $13.1 billion from $14.6 billion, it said.
The surplus reduced the 12-month rolling deficit to $51.1 billion, or 5.8 percent of gross domestic product (GDP) reported for the year to June.
Turkey’s current account deficit has been depicted as the Achilles heel of the economy as the government stimulated growth with more imports and foreign borrowing. But a slump in the lira of almost 40 percent since January is sending economic output plummeting, prompting economists to predict a slump in imports and economic recession.
The current account balance was also helped by tourism revenues, which were $3.69 billion, an increase of $461 million over August 2017, the central bank said.
But severe weakness in the economy remains. Investors are continuing to sell Turkish stocks, bonds and other assets and foreign direct investment has slumped, meaning the central bank is being forced to fund the current account deficit through its own resources.
Portfolio investment recorded a net outflow of $1.79 billion in August, while the central bank’s official reserves fell a massive $8.1 billion during the month, the biggest drop this year.
The lira’s weakness has stimulated inflation, which has surged to almost 25 percent and prompted the government to take emergency measures.