Turkey’s tourism revenue doubled, trade deficit narrowed in 2021

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Turkey’s tourism revenues doubled to almost $25 billion last year and the country’s trade deficit narrowed, according to data on Monday reflecting a recovery from the initial wave of COVID-19 pandemic measures in 2020, Reuters reported.

President Recep Tayyip Erdoğan has presented a shift to a current account surplus as a centerpiece of his government’s sweeping new economic policy, which is focused on low interest rates and stronger exports and credit – despite soaring inflation.

Income from tourism has also grown more important as the central bank seeks to boost reserves and execute market interventions to defend the lira, which lost 44 percent of its value to the dollar last year amid a December currency crisis.

Last year as a whole tourism revenue climbed 103 percent to $24.482 billion, Turkish Statistical Institute (TurkStat) data showed. In the fourth quarter, revenues rose 95 percent to $7.6 billion, only 3 percent below the level in October-December 2019 – the last quarter before the coronavirus began having an impact.

However, the revenues last year as a whole were still well off the $34.5 billion recorded in 2019.

It was TurkStat’s first publication following Erdoğan’s dismissal of its chairman, Sait Erdal Dinçer, at the weekend, less than a year after his appointment.

The move comes after opposition parties and some economists raised questions over the credibility of the agency’s inflation data — concerns that TurkStat has dismissed — and ahead of key January CPI data due on Feb. 3.

The new TurkStat head, Erhan Çetinkaya, was deputy chairman of the BDDK banking watchdog since 2019.

Separately, Tourism Ministry data on Monday showed foreign arrivals jumped 94 percent to 24.7 million last year.

Trade deficit dips

The foreign trade deficit shrank 7.5 percent year-on-year to $46.13 billion in 2021, separate TurkStat data showed on Monday, with exports jumping 32.8 percent and imports rising 23.6 percent.

However, there was a deterioration in December when the deficit surged 49 percent from a year earlier to $6.79 billion, as exports climbed 24.9 percent and imports rose 29.9 percent.

The lira was some 1.4 percent stronger at 13.34 against the dollar after the release of the figures.

The currency has steadied this year after the slide in late 2021 took it to a record low of 18.4 against the dollar, fueling a surge in inflation, before the government took steps to boost the lira including forex market interventions.

According to the calculations of bankers and economists, the central bank has scaled back its interventions but still spent as much as $1 billion in one week in January to keep the lira steady after last month’s volatility.

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