Turkey makes strides on deficit reduction
Turkey’s current account deficit, a long-standing economic hardship, has dropped to $52.5 billion, already beating the government's year-end target.
Turkey’s gaping current account deficit has long marred the country's economic credibility, but new figures suggest that time may be passing. In the government’s midterm economic program, the 2014 year-end current account deficit was projected at $55 billion, or 6.4% of gross national product (GNP), but the results so far are even better, indicating that that target will be surpassed. Optimism is rising that the year-end current account deficit will be around $50 billion or even lower, or less than 6% of GNP.
Last year, the deficit reached $65 billion, or 7.8% of GNP, far above the levels in other emerging economies: 6.7% in South Africa, 4.3% in India, 3.9% in Chile and 3.5% in Brazil. As a result, tackling the gap became an urgent concern. In remarks in March, Deputy Prime Minister Ali Babacan, who oversees the economy, declared that “reducing the current account deficit is the number one priority,” stressing that Turkey's manageable current account deficit/GNP ratio was 4-5%.
