Turkey: C/A deficit deteriorates further

Turkey: C/A deficit deteriorates further
Emre Tekmen - Market Economics | 13 Nov 2013 10:54

At USD 3.3bn, September's current account deficit was higher than the market’s expectations (USD 2.7bn) and our above-consensus forecast (USD 3.0bn). In addition, January-August current account deficit was revised up by a total of USD 1.4bn, mainly due to lower tourism revenues. As a result, 12-month cumulative c/a deficit reached USD 59.1bn in September, from USD 58.5bn in August. Non-energy current account deficit also widened by USD 0.8bn to USD 9.3bn, on a 12-month cumulative basis. Turkey was a net gold importer in September as well, contrary to last year, and 12-month cumulative net gold imports reached a record high of USD 7.3bn. At the same time, we also note that seasonally adjusted current account deficit excluding gold and energy has been widening gradually since the start of the year.

Turkey: Gradual recovery in IP

Turkey: Gradual recovery in IP

At 1.6% y/y, February’s industrial production (IP) index was slightly below the market consensus and our expectation of 2%. On a seasonally and calendar adjusted basis, IP increased by 1.5% m/m, following a rise of 2.4% m/m in January and offset the 3.5% m/m contraction in December. The weaker-than-expected IP data in February hint that the economic recovery is likely to be gradual and slower than envisaged, despite the CBRT’s monetary easing. Yet, we expect the pickup in the manufacturing activity to become more visible in Q2, as suggested by the strong pace of credit growth and above 50 PMI readings.

Turkey: December unemployment rate

Turkey: December unemployment rate

Temporary rise in the unemployment rate

In December, seasonally adjusted unemployment rate increased 0.1pp to 9.6%, and non-farm unemployment rate increased 0.2pp to 11.8%, on our calculations. The employment and participation rates remained strong at 46.0% and 50.9% respectively, only a tad below the record high levels of 46.1% and 51.0% in November.

Turkey: Gold export story reaches an end

Turkey: Gold export story reaches an end

At USD 7.3 bn, January’s foreign trade deficit was slightly above the market expectations (USD 7.0bn). As a result, 12-month cumulative trade deficit increased to USD 84.2bn in January from USD 84.0bn in December. Similarly, 12-month cumulative non-energy trade deficit increased to USD 31.9bn from USD 31.6bn. On a seasonally adjusted basis, exports and imports increased by 2% m/m and 9% m/m, respectively. Imports excluding gold and energy rose by 6% m/m on a seasonally adjusted basis, according to our calculations. On a 3m/3m basis, imports increased for the first time since August 2012, signalling that the monetary easing of the CBRT has finally reflected on import figures. Based on broad economic categories, imports of consumption goods increased 7.6% y/y, intermediate goods by 3.4% y/y, and capital goods by 8.2% y/y.