Account deficit narrows on revenues in services

Turkey's current account deficit dropped by 25.9 percent year-on-year to $5.8 billion in May, according to the Central Bank's monthly report. The significant fall in the deficit, which was slightly above market expectations, was supported by an increase in services sector surplus. The main reasons behind the performance of the services sector were an increase in revenues from construction services and a slowdown in the pace of the tourism industry's downward trend, according to a Vakifbank report issued yesterday. Other positive factors in the closing of the gap were a drop in oil prices and the value of the Turkish Lira, and a slowdown in domestic demand which pulled down imports, according to the Economic Research Department at Vakifbank. According to the estimates of Vakifbank, the current account deficit sat at about 2.3 percent of the gross domestic product (GDP) in May, excluding energy imports. The overall deficit was at 8.8 percent in May, the bank's economists estimate. "Possible increases in the value of the Turkish Lira and oil prices may bring the slowdown in the current account deficit to an end," Vakifbank's report said. Oil prices - which hit $128 per barrel in March, the highest level seen this year - dropped to nearly $100 in May