By JOE PARKINSON
ISTANBUL—Turkey’s trade deficit widened almost 70% on the year in September to $6.7 billion, data showed Wednesday, marking the fastest expansion since April and stoking concerns that the emerging market’s structural imbalance could pose a longer-term threat to growth.
According to figures released Wednesday by the official statistics agency Turkstat, September’s $25 billion of imports rose five times as fast as exports, underscoring the powerful impact of domestic demand in an economy that’s expected to expand 6.8% this year, after tying China for the fastest growth in the Group of 20 in the second quarter, at 10.3%.
The wider-than-expected expansion of the deficit—which has expanded $48.7 billion since January—helped push Turkish assets lower, with the lira and stocks sliding on the disappointing data and investor profit taking.
Economists cautioned that the deficit was likely to widen further as elevated consumer confidence and credit growth continued to outpace weak demand for Turkish exports from Europe, Ankara’s key trading partner.
“Turkey’s external deficit continues to deteriorate very rapidly as September trade gap came in much wider than expected … the macro economic backdrop will likely accentuate imbalances of wide current account gap and possibly sticky-high inflation beyond a base-effect induced moderation in coming few months,” HSBC said in a research note.
Turkey’s central bank governor, Durmus Yilmaz, warned in Tuesday’s inflation report that the current account deficit was a growing concern that may require some “restrictions on demand.”
Turkey usually runs a deficit as it imports investment goods and raw materials to process primarily for Western and other markets, and it also relies on energy imports.
Write to Joe Parkinson at joe.parkinson@dowjones.com
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