At USD 4.7bn, the December C/A deficit came in much better than expected (Erste: USD 5.1bn, consensus: USD 5.4bn). In due course, the non-energy C/A balance came in at a small deficit of USD 54mn. The surprise to our call was mostly linked to the stronger shuttle trade. 
The 12-month rolling C/A deficit fell to USD 48.9bn (6.1% of GDP) in December, from USD 50.8bn in November. There were downward revisions to the previous months' figures, mainly linked to tourism revenues. Excluding energy, the 12-month rolling C/A balance improved to a surplus of USD 3.5bn (0.4% of GDP), from USD 1.5bn in November. 
The y/y improvement in the C/A deficit reached 3.2ppt. 35% of this improvement is attributable to the surge in net gold exports to USD 5.7bn from a negative USD 4.8bn a year ago. Nevertheless, the slowdown in domestic demand is more explanatory. 
USD 5.6bn in portfolio inflows along with banks and non-bank private sector's USD 2.2bn in net loans continued to be the main financing tools in December. The government's and the private sector's debt securities attracted USD 2.8bn and USD 1.4bn respectively. There was also USD 0.6bn in net FDI. On the other hand, non-residents' deposits declined by USD 0.2bn and net errors and omissions registered USD 1.8bn in outflows. All in all, the CBT's FX reserves declined by USD 0.8bn. 
In line with the recovery in domestic demand and decline in gold exports, we foresee the C/A deficit rising to 6.8% of GDP in 2013. TURKSTAT will revise up tourism revenues for the 2001-2012 period due to the change in methodology tomorrow and Deputy PM Babacan previously hinted that the revision could be 0.5% of GDP. Although this may not be fully reflected to the C/A deficit calculations, we will revisit our forecasts. 
Source: bne