A surplus of $ 1.9 billion in the current account balance was unexpectedly in 2019, when the economic growth reached the average figure close to zero with the strong contraction in domestic demand. This is a first since 2001. Already in 2001 in memory of the crisis is equivalent to one of Turkey’s economy.
Data for December show that the balance is back at $ 2,798 million per month.
In the mentioned deficit, the foreign trade deficit in the balance of payments table increased by 2 billion 89 million dollars to 3 billion 402 million dollars and the primary income balance deficit increased by 93 million dollars to 1 billion 87 million dollars. So, Turkey’s economy continues to structural problems with the old way: start saving as soon as the growth is going to be the main causes of the current account balance minus a shortage.
Net revenues from the travel item under the balance of services increased by $ 214 million compared to December 2018, reaching $ 1 billion 112 million.
Net outflows from the investment income item under the primary income balance item increased by $ 75 million compared to December 2018, reaching $ 955 million.
The inflows from the secondary income balance item increased by $ 165 million to $ 291 million.
Data for December are not surprising for Economists. The general expectation was that in December 2019, the current account balance gave a deficit of $ 3 billion and a surplus of $ 1.2 billion in 2019.
But an important part of the problems is that the capital inflows are decreasing while the current account deficit is returning.
In December, net direct investments had only $ 281 million in inflows. Direct investments decreased by 41.3 percent compared to the previous year and fell to 5.5 billion dollars. Moreover, the quality of these investments is extremely poor; Almost half (57.3 percent) are focused on real estate investments. Incoming money does not turn into work; He is not willing to invest in the kind of solution to unemployment.
Portfolio investments are in a downward trend throughout 2019. While there was a net capital outflow of $ 871 million in December, the outflow of the whole year was $ 1.1 billion.
The resulting image, Turkey, forcing the internal resources of the economy; Treasury spending, tax discounts are tried to be enlarged with interest discounts. Although this kind of unhealthy growth does not approach the overheating dimension, it will not be sustainable because it is not supported by capital inflow, and it will take much shorter time / area to create pressure on TL as the current account deficit increases.
Both the events in Idlib, the fact that the Turkish soldier is kept permanently in the region and the potential for conflict increases, the hormonal structure and unsustainability of the growth, and the fact that it is not supported by the outsourcing input show an increased risk of the Turkish lira being exposed to those familiar symptoms of overheating earlier than expected. Although the current account deficit of 20-25 billion dollars expected at the end of 2020 seems to be lower than GNP, the risk to be created under current conditions seems to be much higher than its own dimension. To tell us.