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Can Turkey work miracle on current account deficit?

Turkey’s battle against its gaping current account deficit appears to be going well, but dependence on foreign energy supplies remains a major stumbling block.
Shoppers walk in Grand Bazaar in Istanbul April 26, 2008. For hundreds of years Istanbul has lured intrepid travellers in search of the exotic carpets, jewelry and fabrics which filled the ancient alleways of the city's Grand Bazaar. Istanbul's shops are now more likely to entice customers with the wares of Nike, Samsung and GAP as shopping malls sprout across the city at a dizzying pace - a phenomenom which strikingly illustrates Turkey's emerging prosperity. To match Feature TURKEY-MALLS/   REUTERS/Osman

Turkey’s current account deficit, about $65 billion last year, is the ailing side of the country's economy. Ankara’s middle-term economic program projects the gap downward, to $55.5 billion, by the end of 2014. More optimistic projections see it narrowed even further, below $50 billion. Trying to reduce the gap without reducing dependence on foreign energy supplies would, however, require a complex effort.

The elusive goal of a lower current account deficit requires a reduction in imports and a boom in exports, as happened in gold. While $727 million worth of gold was imported in the first two months of 2013, $413 million worth of gold was exported for the same period this year. It is a figure that helps reduce the current account deficit. Similarly, export items such as textiles and ready-to-wear clothing, which depend little on imports, are major antidotes against the current account deficit. The textile sector produced a current account surplus of $15.2 billion in 2013.

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