Turkey sees surge in current account deficit, fall in employment levels: report

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Turkey’s current account deficit leapt to $4.06 billion in November, central bank data showed on Monday, exceeding a poll forecast of $3.7 billion as the trade gap grew and the economy sought to shake off the effects of the coronavirus pandemic, Reuters reported.

The outbreak’s impact was reflected in September-November unemployment data, showing labor force participation down to 50.0 percent and employment down by nearly 900,000 from a year earlier. The unemployment rate was 12.7 percent, unchanged from a month ago.

The lira, hit by dollar strength on Monday morning, was 1.7 percent weaker at 7.48 after the data.

The current account deficit, a perennial weak point in the economy, was mainly due to a surge in the trade deficit, which rose $2.9 billion from a year earlier, Turkish Statistical Institute (TurkStat) data showed, as well as a $1.45 billion drop in services income.

The foreign trade deficit, a main component of the current account, leapt 153.5 percent year-on-year in November to just above $5 billion according to the general trade system, data from TurkStat showed.

Exports fell 0.9 percent and imports jumped 15.9 percent year-on-year, the institute said.

The 12-month running cumulative deficit rose to $37.974 billion, the data also showed. In its medium-term program, the government had forecast a deficit of $24.4 billion for 2020.

That program also forecast an unemployment rate of 13.8 percent at the end of this year, but the rate actually fell to 12.7 percent as of September-November, down from 13.4 percent a year earlier, held down by a ban on layoffs amid the coronavirus pandemic.

However, the labor force participation rate fell to 50.0 percent from 53.0 percent a year earlier and employment decreased by 896,000 to 27.4 million, TurkStat figures showed.

The data also showed 27.6 percent of young people were neither employed nor in school in October, up from 26 percent a year earlier and edging closer to the youth employment rate of 30.6 percent.

Reflecting the pandemic’s toll on all workers, the number of those too discouraged to seek employment rose to a new record of more than 1.5 million, well over double the year-earlier level.

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