ISTANBUL—Turkey's current-account deficit narrowed to a 21-month low in July as exports increased, a sign the economy is rebalancing in line with the central bank's projections.
Exports to the Middle East and North Africa are helping offset a decline in trade with the struggling euro zone, Turkey's biggest trading partner. Lower oil prices and declining domestic demand have also contributed to the tighter current-account gap.
"We expect narrowing in cumulative current-account deficit to continue until October and maintain our year-end current-account deficit forecast at $59.1 billion, which is 7.4% of estimated GDP, down from 10% in 2011," said Basak Karaaslan, an economist at Finansbank.
The gap in July narrowed to $3.86 billion from $5.42 billion a year earlier, central-bank data showed Tuesday. Analysts surveyed by Dow Jones Newswires had expected a deficit of $4.1 billion. It is also narrower than June's $4.25 billion figure. The deficit for the 12 months to July narrowed to $61.4 billion, or 7.9% of gross domestic product, from $63 billion in June.
Click here to read the full article from the Wall Street Journal.