Turkish PM: current account-deficit no threat to economy

The deficit in Turkey's current account widened to $51.9 billion in the first 10 months of 2013

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Turkish Prime Minister Tayyip Erdogan on Tuesday blamed Ankara's widening current-account deficit on large gas and oil imports and said the gap would not pose a threat to the country "for the next four or five years".

"We have natural gas and oil, which is imported," Erdogan said in a speech during a trip to Japan.


The gas imports are "causing this current-account deficit," he said through an interpreter. "It's not because of what the government has done."

The deficit in Turkey's current account - the broadest measure of trade in goods and services - widened to $51.9 billion in the first 10 months of 2013 from $39.6 billion a year earlier.

The trade deficit narrowed in November, but this was taken as a sign that one of the world's recently most robust developing economies is slowing just as it faces fresh headwinds from a high-level corruption scandal.

Erdogan said that Turkey is working on hydropower, thermal and renewable energy sources to tackle the current-account deficit. "For the next four or five years we believe that this current account deficit will (not) be a threat for us. It has never been a threat for our economy," Erdogan said.

Erdogan did not directly address the corruption scandal, which has hit business sentiment.

In December, three ministers resigned after their sons were among dozens of people detained as part of a probe into procurement practices.

The trade deficit shrank to $7.151 billion in November from $7.195 billion a year earlier. Exports rose a modest 3.6 percent to $14.25 billion but imports expanded just 2.2 percent to $21.4 billion.

The figures underlined how much Turkey's growth prospects have worsened since it grew at a rate of more than 10 percent in the second quarter of 2011.

The U.S. Federal Reserve will begin winding down, or tapering, its $85 billion-a-month money-printing program this month, and emerging markets are seeing foreign investment pull back as a result. Turkey is among the most vulnerable with its huge current-account deficit and its reliance on external financing.

The lira hit a new record low against the dollar on Monday.

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