Page 39 - TURKRptOct19

Brexit, British Chamber of Commerce in Turkey (BCCT) chairman Chris Gaunt told state news service Anadolu Agency on October 8.
Current bilateral trade volume between the two countries stood at around £18bn ($23bn), Gaunt said.
5.2.2 Current account dynamics
Turkey’s 12-month rolling current account balance continued to improve in July with the best reading for more than 17 years, but ING expects to see the country’s rebalancing trend end towards the latter half of 3Q19.
The balance, having contracted since mid-2018 as Turkey’s currency crisis impacted on the nation’s import and export dynamics, turned to a surplus in June and dived further into positive territory in July, with the recorded $4.45bn surplus posted as the best reading since early 2002.
“The recovery trend in external imbalances has stemmed from weak economic activity in the aftermath of financial market volatility last year weighing on import demand, while exports have followed a rising track with increased price competitiveness,” ING’s chief economist for Turkey Muhammet Mercan said in a September 13 note to investors.
“Expansion in services income with tourism revenues has also contributed to this trend. In line with consensus, the surplus in July at $1.2 billion contributed to the further improvement in the annual deficit, now at around +0.6% of GDP,” he added.
The breakdown of the latest data showed a further narrowing in foreign trade, which along with a supportive reading from services, thanks to tourism, was the main driver of the monthly improvement, turning to surplus from the minus $2.2 billion deficit over the same period of 2018, Mercan said.
On the capital account, minor inflows were recorded in July at $1.2bn, as asset acquisitions by locals roughly offset debt creating flows, an improvement by comparison with recent months with the increasingly supportive stance of global central banks. “Given mild external surplus and relatively small inflows via net errors & omissions, official reserves rose by $3.2 billion,” Mercan also noted.
Summarising developments and giving his outlook, the economist said: “Overall, the July data shows a continuation of improvement in external imbalances while flow outlook somewhat recovered with a relatively supportive global backdrop on the back of increasing market expectations of supportive
39 TURKEY Country Report October 2019 www.intellinews.com