ANKARA - The Central Bank released a statement on Wednesday about balance of payments developments in January-October 2003.
The main points related to the balance of payments developments in January-October 2003 are summarized below:

I- CURRENT ACCOUNT
After recording surpluses in August and September in this year, the current account recorded a deficit of 119 million U.S. dollars in October of 2003. As for the period of January-October of 2002 and 2003, the current account balance recorded a surplus of 18 million U.S. dollars and a deficit of 4.103 million U.S. dollars respectively.

Foreign Trade
In comparison with the same period of the previous year, the foreign trade balance recorded a deficit of 10.839 million U.S. dollars increasing by 75.6 percent in January-October 2003. The key factors underlying this development are:
- the increase of export (FOB) revenues by 31.1 percent, realizing as 38.317 million U.S. dollars.
- the decrease of shuttle trade by 3.9 percent, realizing as 3.224 million U.S. dollars (Since the related survey for October 2003 has not been completed yet, an estimate is used).
- the increase of import (CIF) expenditures including gold imports by 34.8 percent, realizing as 55.571 million U.S. dollars.

Services
When compared to the same period in 2002, services surplus amounted to 8.219 million U.S. dollars by a 17.9 percent increase in January-October 2003, as the tourism revenues increased. Over the same period, the net tourism revenues are expected to amount to 6.919 million U.S. dollars by an 13.3 percent increase (Since the related surveys have not been completed yet, figures for October 2003 are estimated), and in line with the increasing trade volume, transportation revenues and expenditures, the other important item of this category, indicated an increase of 19 percent and 30.2 percent, respectively. Thus, compared to the same period of the previous year, net transportation revenues recorded a decrease of 5.8 percent amounting to 652 million U.S. dollars in 2003.

Income
Investment income, which had shown a net outflow of 3.561 million U.S. dollars in January-October 2002, also recorded a net outflow of 4.467 million U.S. dollars 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 201, 1.060 and 3.206 million U.S. dollars in January-October 2003, respectively.
In January-October 2003, interest expenditures of long-term loans increased by 6.9 percent, realizing as 3.471 million U.S. dollars. Among the important items under this heading are the interest expenditures of long-term loans of the General Government and the interest payments of the deposit accounts opened with the Central Bank.

Current Transfers
In comparison with the same period in 2002, current transfers, increased by 7.4 percent, realizing as 2.984 million U.S. dollars in January-October of 2003. Meanwhile, workers' remittances, one of the main sub-items of current transfers, realized as 1.929 U.S. dollars in the same period of 2003. Imports with waiver, the other significant sub-item, recorded a decrease of 6.8 percent, realizing as 807 million U.S. dollars.

II- CAPITAL AND FINANCIAL ACCOUNTS
In January-October 2003, while there is no transaction recorded in the migrants' transfers, which is the sub-item of capital account, the main developments in financial account are summarized below:

Direct Investment
With regard to the direct investments, non-residents' net direct investment in Turkey, which includes the loans received from foreign direct investors abroad, recorded an outflow of 1 million U.S. dollars in October 2003. However, in comparison with the same period of 2002, a 62 percent decrease amounting to 369 million U.S. dollars was observed in January-October 2003. 98 million U.S. dollars of this amount belongs to the net loans received from foreign direct investors abroad.
Residents' net direct investment abroad, which had shown an increase of 55 million U.S. dollars in January-October 2002, also resulted in an increase of 403 million U.S. dollars in January-October 2003.
As a result, direct investments had shown an outflow of 34 million U.S. dollars in net terms in January-October 2003.

Portfolio Investment
Portfolio investment, which had resulted in a net inflow of 326 million U.S. dollars in October 2003, had shown a net outflow of 672 million U.S. dollars and a net inflow of 2.791 million U.S. dollars in January-October of 2002 and 2003, respectively.
As for the developments in portfolio investments' assets side, it is observed that residents' security transactions abroad recorded net purchases of 1.522 million U.S. dollars, and of 811 million U.S. dollars in January-October 2002 and 2003, respectively.
As for the developments in portfolio investments' liabilities side, general government's borrowing through bond issues in international capital markets, realized as net borrowings of 493 million U.S. dollars in January-October 2002, and of 1.968 million U.S. dollars in January-October 2003. Besides, non-residents' net purchases of both equity securities and government debt securities issued in the domestic capital markets realized, respectively, as 762 million U.S. dollars and 1.049 million U.S. dollars in January-October 2003.

Other Investments
The other investment account, which is composed of trade credits, loans and foreign exchange deposit accounts, recorded a net inflow of 6.632 million U.S. dollars in January-October 2002, and of 1.742 million U.S. dollars in January-October 2003.
a. Assets
While trade credits, which are extended in return for export-related transactions, realized in net terms as 852 and 1.270 million U.S. dollars, loans extended realized in net terms as 272 and 469 million U.S. dollars in January-October of 2002 and 2003, respectively.
Banks' foreign exchange holdings with foreign correspondents, which decreased by 725 million U.S. dollars in January-October 2002, also decreased by 1.157 million U.S. dollars in the same period of 2003.
b. Liabilities
The liabilities side of other investment indicates that trade credits, which are mainly received in return for import-related transactions, realized a net disbursement of 1.878 million U.S. dollars in January-October 2002. Over the same period in 2003, a net disbursement of 1.284 million U.S. dollars, of which 764 million U.S. dollars consists of long-term and 520 million U.S. dollars consists of short-term, was observed.
With regard to the sub-categories of the loans, due to the International Monetary Fund loans, a net repayment of 6.138 million U.S. dollars, and of 926 million U.S. dollars were realized by the Central Bank and net disbursements of 12.503 million U.S. dollars and 926 million U.S. dollars were realized by General Government in January-October of 2002 and 2003, respectively. For the same periods of 2002 and 2003, net repayments of 434 million U.S. dollars and of 1.716 million U.S. dollars were materialized respectively by the General Government for the loans used from international capital markets and other international organizations. Moreover, a net repayment of 1.126 million U.S. dollars and a net disbursement of 926 million were realized by the Banks; a net disbursement of 322 million U.S. dollars and of 995 million U.S. dollars were also realized in the Other Sectors in January-October of 2002 and 2003, respectively.
FX deposit accounts, which had increased by 308 million U.S. dollars in January-October 2002, increased in the amount of 1.101 million U.S. dollars in January-October 2003, owing to the increase of 384 million U.S. dollars in deposit accounts opened with the Central Bank and an increase of 717 million U.S. dollars in deposit accounts opened with the resident banks.
Reserve Assets
Official reserves, which is the last item of financial account, had increased by 5.750 million U.S. dollars in January-October 2002, and also increased by 4.472 million U.S. dollars in January-October 2003.
(UK-AÖ) 24.12.2003