Turkey’s current account deficit shrinks to 35-month low

Turkey’s current account deficit, the main sore spot of the emerging economy, stood at $2.02 billion in October this year, making for an annualized gap of $45.72 billion, the lowest since December 2010.

The Central Bank data comes at a time when the economy is apparently shifting from the fast lane to a more moderate growth pace.

During the January-October 2014 period, Turkey’s total current account deficit - which represents the total balance of trade of goods and services, net factor income and net transfer payments - declined by almost 40 percent from last year, according to the Dec. 11 data.

The total current account deficit over that period dropped to $33.1 billion, a decrease of $19.3 billion compared to the same period the previous year, the Bank said in a statement.

Turkey’s current account deficit was $2.3 billion in September.

The October current account deficit was estimated to stand at $1.9 billion, according to Anadolu Agency’s Growth Expectation survey.

The Central Bank attributed the decrease to a $16.8 billion drop in the foreign trade deficit and a $2.2 billion surplus in the services sector.

The foreign currency inputs from “unknown sources” totaled $5.92 billion in the first 10 months of the year.

Turkey’s gross domestic product (GDP) increased a mere 1.7 percent year-on-year in the third quarter, according to official data released by the Turkish Statistical Institute (TÜİK) a day earlier, far below forecasts that had predicted an increase of around 3 percent.

The economic administration slashed its growth forecast for 2014 from 4 percent to 3.3 percent in October, citing external factors including the chaos in neighboring Syria and Iraq and the...