(Adds analyst comment, background)
By Daren Butler
ISTANBUL, March 10 (Reuters) - Turkey's current account for January showed a surprise surplus on Tuesday, reflecting sharp falls in exports and imports as the economy heads towards recession.
Turkey's current account for the month showed a surplus of $291 million, the central bank said, compared with a Reuters poll forecast of a $250 million deficit.
It was the first time the current account had shown a surplus since September 2004, when it stood at $233 million. It follows a slew of other data highlighting the depth of economic slowdown and boosting expectations of more rate cuts after borrowing rate cuts totalling 525 basis points since November.
"The current account balance shifted into surplus mainly because of the decrease in the foreign trade deficit and the increase in net inflows in current transfers," the central bank said.
Net inflows of direct investment in January fell 37.5 percent from a year earlier to $614 million, the statement said.
In January 2008 the current account had showed a deficit of $4.149 billion.
The foreign trade deficit, according to the balance of payments presentation, stood at $78 million in January, tumbling 98.3 percent from the same month a year earlier.
The current account deficit had been a major weak point of the Turkish economy until imports began to fall steeply in recent months due to weak domestic demand and lower commodity prices as the global financial crisis bites.
"January data supported our view that sharply slower 2009 growth, a weaker lira and substantially lower energy and commodities prices will produce a smaller, more easily financed current account deficit this year," said JP Morgan economist Yarkin Cebeci.
The Reuters poll had forecast a deficit for the whole of 2009 of $16.6 billion. The current account showed a deficit of $41.623 billion in 2008, revised data showed, compared with an initial figure of $41.416 billion.
The central bank revised the December current account deficit to $3.092 billion from a previously reported $3.003 billion.
On Monday, data showed industrial production suffered its biggest fall in 12 years in January, tumbling 21.3 percent year-on-year and capacity utilisation remained at a record low of 63.8 percent in February, reinforcing recession expectations.
(Editing by Ron Askew)