ANKARA - The current account balance recorded a deficit of 3 billion 467 million U.S. dollars in January-May of 2003.
The current account balance deficit was 1 billion 513 million U.S. dollars in the same period of the previous year.
The main points related to the balance of payments developments in January-May 2003 are summarized below:
I- CURRENT ACCOUNT
Foreign trade deficit, which increased by 68,9 percent in comparison with the same period of the previous year, realized as U.S. dollars 4.171 million in January-May 2003. The key factors underlying this development are;
- the increase of export revenues by 30,1 percent,
- the decrease of shuttle trade by 12,3 percent and,
- the increase of import (CIF) expenditures by 31,3 percent.
Moreover, net revenues from services, income, and current transfers decreased by 26,4 percent, amounting to U.S. dollars 704 million in January-May 2003. As a result, the current account balance recorded a deficit of U.S. dollars 1.513 million and U.S. dollars 3.467 million in January-May of 2002 and 2003, respectively.
1- Foreign Trade
Export (FOB) revenues, which had realized as U.S. dollars 13.666 million in January-May 2002, increased by 30,1 percent realizing as U.S. dollars 17.778 million in January-May 2003. Import (CIF) expenditures including gold imports increased by 31,3 percent from U.S. dollars 18.869 million in January-May 2002 to U.S. dollars 24.784 million in January-May 2003.
Shuttle trade decreased by 12,3 percent from U.S. dollars 1.600 million in January-May 2002 to U.S. dollars 1.403 million in January-May 2003.
''The goods for processing'' item, which is composed of the exports/imports of raw materials and of goods after being processed, realized U.S. dollars 4.716 million in January-May 2003. This amount included the net figure of exported goods being processed in Turkey, which realized as U.S. dollars 4.642 million, and the net export figure of U.S. dollars 74 million belonging to goods being processed abroad.
As a result of these developments, the foreign trade balance, which had resulted in a deficit of U.S. dollars 2.470 million in January-May 2002, increased by 68,9 percent to a deficit of U.S. dollars 4.171 million in January-May 2003.
2- Services
Among the important items under the heading services, compared to the same period of the previous year, the tourism revenues recorded a decrease of 16 percent while the tourism expenditures increased by 2,3 percent. As a result, net tourism revenues amounted to U.S. dollars 1.027 million by a 25,6 percent decrease. Among the other important item of this category, transportation revenues indicated an increase of 22 percent while transportation expenditures recorded a decrease of 26,5 percent in January-May 2003 compared to the same period in 2002. Thus, in January-May 2003, net transportation revenues recorded an increase of 11,7 percent amounting to U.S. dollars 345 million.
3- Income
Investment income, which had shown a net outflow of U.S. dollars 2.069 million in January-May 2002, also recorded a net outflow of U.S. dollars 2.415 million in the same period of 2003.
The main components of investment income, direct investment income, portfolio investment income, and other investment income consisting of the interest income and expenditures had shown a net outflow of U.S. dollars 69, 651 and 1.695 million in January-May 2003, respectively. Interest expenditures of long-term loans increased by 6,5 percent and short-term loans decreased by 19,5 percent, realizing as U.S. dollars 1.840 million and 132 million, respectively.
4- Current Transfers
Current transfers decreased by 2,8 percent from U.S. dollars 1.369 million in January-May 2002 to U.S. dollars 1.330 million in January-May 2003.
Workers' remittances realized as U.S. dollars 794 million by a 2,2 percent decrease in January-May 2003.

II- FINANCIAL ACCOUNTS
The main developments in financial accounts are summarized below:
1- Direct Investment
Regarding direct investments, in comparison with the same period of 2002, non-residents' net direct investment in Turkey, which includes the loans received from foreign direct investors abroad, decreased by U.S. dollars 195 million in January-May 2003, amounting to U.S. dollars 203 million. Residents' net direct investment abroad, which had shown an outflow of U.S. dollars 22 million in January-May 2002, also resulted in an outflow of U.S. dollars 172 million in January-May 2003. As a result, direct investments had shown an inflow of U.S. dollars 31 million in net terms in January-May 2003.
2- Portfolio Investment
As for the developments in portfolio investments' assets side, it is observed that residents' security transactions abroad recorded net purchases of U.S. dollars 1.597 million, and of U.S. dollars 117 million in January-May 2002 and 2003, respectively.
The developments under portfolio investments' liabilities side are as follows:
General government's borrowing through bond issues in international capital markets, realized as net borrowings of U.S. dollars 983 million in January-May 2002, and of U.S. dollars 763 million in January-May 2003.
Besides, in January-May 2003, non-residents' security transactions had shown net sales of U.S. dollars 241 million, of which U.S. dollars 19 million consists of net purchases of equity securities and U.S. dollars 260 million consists of net sales of debt securities.
Consequently, portfolio investment resulted in a net outflow of U.S. dollars 171 million in January-May 2002, and a net inflow of U.S. dollars 243 million in January-May 2003.
Other Investment
a. Assets
As for the assets side of other investment, statistics on exports realized in the form of cash against goods provided by State Institute of Statistics (SIS) have been included to the recordings of balance of payments, adjusting the previous years since 1999. Accordingly, trade credits item, which was incorporated into assets side, realized as U.S. dollars 389 and 702 in January-May of 2002 and 2003, respectively.
Loans extended had realized as U.S. dollars 237 and 585 million in January-May of 2002 and 2003, respectively.
Banks' foreign exchange holdings with foreign correspondents, which decreased by U.S. dollars 1.336 million in January-May 2002, also decreased by U.S. dollars 3.764 million in the same period of 2003.
b. Liabilities
As for the liabilities side of other investment, in trade credits, a net disbursement of U.S. dollars 837 million and of 534 million realized in January-May of 2002 and 2003, respectively.
As for the sub-categories of this caption, a net disbursement of U.S. dollars 9.661 million, and a net repayment of U.S. dollars 232 million was realized by general government in January-May of 2002 and 2003. In the same periods, a net repayment of U.S. dollars 237 million and of 259 million were realized in the banking sector; a net disbursement of U.S. dollars 340 million and a net repayment of U.S. dollars 96 million were also realized in the other sectors in January-May 2002 and 2003, respectively.
Additionally, FX deposit accounts, which had decreased by U.S. dollars 396 million in January-May 2002, increased in the amount of U.S. dollars 838 million in January-May 2003, owing to the increase of U.S. dollars 113 million in deposit accounts opened with the Central Bank and an increase of U.S. dollars 725 million in deposit accounts opened with the resident banks.
As a result, other investment item had recorded an inflow of U.S. dollars 4.618 million in January-May 2002, and of U.S. dollars 2.963 million in January-May 2003.
c. Reserve Assets
Official reserves, which is the last item of financial account, had increased by U.S. dollars 2.649 million in January-May 2002, and also increased by U.S. dollars 52 million in January-May 2003.
(BRC) 16.07.2003