Feb Tourist Arrivals - Still Falling

Data: Foreign tourist arrivals fell 7.6% YoY in February to 997, 571: in terms of sequential change, the rise of 1.6% MoM was 1.6 standard deviations below what one normally expect in February. In terms of the the underlying momentum trend, the 6m count is once again in negative territory, for the ninth month in the last 10.  

Comment: The data has not attracted a lot of attention, probably because the months of December to February are the lowest point of the tourist season for Turkey, but still, foreign arrivals during these months fell 1.5% YoY. January and February usually account for only 6.4% of the year's total foreign tourist arrivals, but the performance so far suggests a fall of around 1% for the year.

Still, earnings from foreign tourists came to US$23.02bn last year on a balance of payments basis, which was equivalent to 16.4% of merchandise exports, and an amount equivalent to just under 30% of Turkey's total current account deficit. Last year, those earnings grew 10.6% YoY, in line with the 9.9% YoY rise in the number of foreign tourists.

The moral? The downturn over the winter doesn't matter much. But the numbers need watching: if by mid-season Europe's recession has choked off Turkey's tourism business, the job of reversing the current account deficit, narrowing the private sector savings deficit, and bolstering the internal cashflow of the economy becomes significantly more difficult.