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October 12, 2018 www.intellinews.com I Page 5
fact that power imports from Belarus are likely to reduce energy costs even more.
For Moscow, establishing and even financing
the Belarusian nuclear plant makes sense as it weakens the argument for a BRELLixt. Minsk is nominally an independent player and so the power supplies to the Baltics appear to have been diver- sified away from Russia to an extent, reducing the political risks.
“They’ve hit the wall, and hard”: Record Turkish current account surplus suggests deep recession
But they knew better and the result is they have hit the wall and hard. Case of taking the car to the body shop for a rebuild, but not sure the state of the passengers. They seem dazed, in disbelief as to what has happened. I think they thought the shiny new Turkish car was indestructible.”
The market was expecting a surplus of $2.5bn for the month, according to a Reuter’s poll of economists. Ten economists in the survey also cut their median current account deficit forecast for 2018 to $38.5bn from a previous $47bn.
Across January-August, the deficit rose, by 14% y/y to $31bn.
The latest data also showed the 12-month cumulative current account deficit declining from $54.6bn in July to $51.1bn in August, the lowest figure seen since February — but that still compared very unfavourably with the $36.8bn seen in August 2017.
The decision will boil down to a tussle between the economic and the political arguments. Germany’s example of choosing to push ahead with the controversial Nord Stream 2 gas pipeline, where Berlin considers the plentiful supply of cheaper Russian gas to outweigh the political objects of other European countries
in the northwest corner of the union, suggests that economics will trump politics in the BRELL countries too.
According to the latest central bank survey, Tur- key’s end-2018 current account deficit expecta- tions declined to $49.7bn in September from $52.7bn in August.
The current account deficit stood at 5.8% of GDP in August, down from a peak of 6.6% of GDP in May, according to Capital Economics’ calculations.
Earlier this week, the International Monetary Fund (IMF) announced in its latest edition of the World Economic Outlook that it expected Turkey’s current account deficit to come in at 5.7% of GDP in 2018, slightly better than the 5.5% recorded in 2017. The fund’s previous forecast was for 5.4% of GDP in 2018.
The Turkish government forecasts that the cur- rent account deficit will fall to 4.7% in 2018 from 5.6% in 2017, according to its recently released medium-term economic programme.
“Almost entirely reflects a slump in imports”
“Turkey’s current account position improved fur- ther in August adding to the evidence that a weak- er lira is helping the economy to rebalance. But this adjustment almost entirely reflects a slump in imports, a sign that domestic demand has been hit hard sharply following August’s collapse in
the lira and a sharp tightening of financial condi- tions,” Jason Tuvey of Capital Economics said in a research note.
The current account position tends to improve in