ANKARA - The current account deficit in 2003 was announced as 6 billion 808 million U.S. dollars.
The Central Bank unveiled the balance of payments developments in December 2003 and whole 2003.
The current account deficit in December 2003 increased by 87,1 percent to USD 2.459 million in compared with December 2002.
On an annual basis, the deficit in 2003 has realized as USD 6.808 million by growing almost 3,5 times the deficit in the previous year, owing to the significant increase in trade deficit in spite of the improvement in services balance mainly connected with higher tourism revenues.
Below is the balance of payments developments in December 2003 and whole 2003:

I- CURRENT ACCOUNT
The current account deficit in December 2003 increased by 87,1 percent to USD 2.459 million in compared with December 2002.
On an annual basis, the deficit in 2003 has realized as USD 6.808 million by growing almost 3,5 times the deficit in the previous year, owing to the significant increase in trade deficit in spite of the improvement in services balance mainly connected with higher tourism revenues.
In comparison with 2002, the foreign trade balance recorded a deficit of USD 13.934 million increasing by 67,1 percent in 2003. The key factors underlying this development are:
- the increase of export (FOB) revenues by 30 percent, realizing as USD 46.878 million,
- the decrease of shuttle trade by 2,8 percent, realizing as USD 3.953 million,
- the increase of import (CIF) expenditures including gold imports by 33,3 percent, realizing as USD 68.734 million. It should also be noted that total gold imports has reached to USD 2.595 million in 2003, increasing by USD 1.187 million since the end of 2002.

SERVICES
When compared to 2002, services surplus amounted to USD 8.936 million by a 13,4 percent increase in 2003, mainly due to increase in the tourism revenues. According to the related surveys disseminated by State Institute of Statistics, over the same period, the tourism revenues amounted to USD 9.676 million by a 14,1 percent increase. The increase in tourism revenues is stemmed from 6 percent increase in the number of foreign visitors and 7,8 percent increase in the average expenditures of the foreign visitors. As a result, net tourism revenues amounted to USD 7.563 million by a 14,6 percent increase for the overall 2003.
In line with the increasing trade volume, transportation revenues and expenditures, the other important item of this category, indicated an increase of 15,1 percent and 25,7 percent in 2003, respectively. Thus, compared to the previous year, net transportation revenues recorded a decrease of 8,9 percent amounting to USD 784 million in 2003.

INCOME
Investment income, which had shown a net outflow of USD 4.554 million in 2002, also recorded a net outflow of USD 5.428 million in 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 USD 268, 1.207 and 3.953 million in 2003, respectively.
In 2003, interest expenditures of long-term loans increased by 5,5 percent, realizing as USD 4.276 million. Among the important items under this heading, the interest expenditures of long-term loans of the General Government and the interest expenditures of the Central Bank increased by 11,4 percent and 9,8 percent, respectively.

CURRENT TRANSFERS
In comparison with 2002, current transfers increased by 3,7 percent, realizing as USD 3.618 million in 2003. Over the same period, while workers' remittances, one of the main sub-items of current transfers, posted an inflow of USD 2.321 with a 19,9 percent increase, imports with waiver, the other significant sub-item, recorded a decline of 5,5 percent, realizing as USD 996 million.

II- CAPITAL AND FINANCIAL ACCOUNTS
In January-December 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 inter-company loans received from foreign direct investors abroad, recorded an inflow of USD 120 million in December 2003. However, in comparison with 2002, a 44,3 percent decrease amounting to USD 578 million was observed for the overall 2003. USD 169 million of this amount belongs to the net loans received from foreign direct investors abroad, which realized as USD 453 million in 2002.
Residents' net direct investment abroad, which had shown an increase of USD 175 million in 2002, also resulted in an increase of USD 499 million in 2003.
As a result, direct investments had shown an inflow of USD 79 million in net terms in 2003, showing 90,8 percent decrease compared to 2002.

PORTFOLIO INVESTMENT
Portfolio investments recorded a net outflow of USD 593 million and a net inflow of USD 2.287 million in 2002 and 2003, respectively.
As for the developments in portfolio investments' assets side, it is observed that residents' security transactions abroad recorded a 20,3 percent decrease in net purchases from USD 2.096 million to USD 1.670 million in 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 USD 1.029 million in 2002, and of USD 1.509 million in 2003.
Regarding equity securities, the increasing trend in the previous months has also been sustained in this month and the non-residents purchased, in net terms, USD 57 million in December 2003, bringing overall net purchases to USD 1.011 million for the entire period of January-December 2003. As regards the government debt securities issued in the domestic capital markets, non-residents' net purchases of USD 534 million were recorded in December 2003, bringing the overall net purchases to 1.614 million in 2003.

OTHER INVESTMENTS
The other investment account, which is composed of trade credits, loans and foreign exchange deposit accounts, recorded a net inflow of USD 7.256 million in 2002, and of USD 3.268 million in 2003.

a. Assets
Trade credits, which are extended in return for export-related transactions, realized in net terms as USD 921 and 769 million in 2002 and 2003, respectively. With regard to the loans sub-item, while a net repayment of USD 19 million realized in 2002, USD 404 million was extended in 2003.
Banks' foreign exchange holdings with foreign correspondents, which decreased by USD 594 million in 2002, also decreased by USD 719 million in 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 USD 2.483 million in 2002. For 2003, a net disbursement of USD 2.098 million, of which USD 966 million consists of long-term and USD 1.132 million consists of short-term, was observed.
With regard to the sub-categories of the loans, due to the International Monetary Fund loans, while a net repayment of USD 6.138 million and of USD 1.479 million were realized by the Central Bank in 2002 and 2003 respectively. General Government realized a disbursement of USD 503 million in December 2003, while a disbursement of USD 1.681 million and repayment of USD 252 million were recorded for the entire period of January-December 2003. In addition, the General Government for the loans used from international capital markets and other international organizations materialized a net repayment of USD 2.194 million for the overall 2003. Finally, a net repayment of USD 1.028 million and a net disbursement of 1.975 million were realized by the Banks; a net disbursement of USD 437 million and of USD 876 million were also realized in the Other Sectors, in 2002 and 2003, respectively.
FX deposit accounts, which had increased by USD 348 million in 2002, also increased by USD 1.368 million in 2003, owing to the increase of USD 497 million in deposit accounts opened with the Central Bank and an increase of USD 871 million in deposit accounts opened with the resident banks.
RESERVE ASSETS
Official reserves, which is the last item of financial account, had increased by USD 6.153 million in 2002, and also increased by USD 4.047 million in 2003.

(BRC-AÖ) 11.03.2004