Turkey’s Current Account Deficit Rises to $11.5 Billion
Lİra
Turkey’s current account deficit (CAD) stood at $3.8 billion in January, surpassing market expectations of $3.3 billion but remaining below the corporate forecast of $4.5 billion. This led to an increase in the annual CAD from $10 billion to $11.5 billion.
Key Highlights from January Data:
- Core balance (excluding gold & energy) posted a $2.4 billion surplus, though the annual surplus declined to $51.2 billion from $52.6 billion.
- The foreign trade deficit (balance of payments-defined) narrowed to $5.6 billion, compared to $6.2 billion in December, bringing the annual trade deficit to $57.6 billion.
- Gold imports fell to $1.5 billion in February from $2 billion, while gold exports rose slightly to $384 million from $355 million.
- Service sector net income stood at $3.1 billion, with tourism revenues rising to $2.4 billion from $2.1 billion.
- Primary income and secondary income balances recorded net outflows of $1.2 billion and $128 million, respectively.
Capital Movements:
- Net portfolio inflows reached $2.2 billion, with strong $1.7 billion demand for government domestic debt securities (GDDS).
- Foreign investors made minimal equity purchases ($12 million) but sold off bonds—$211 million in government issues and $336 million in bank issues.
- Net purchases of bonds from the non-banking sector totaled $880 million.
February Projections and 2025 Outlook:
- Foreign trade deficit widened from $7.5 billion to $8.2 billion, pushing the annual trade deficit to $84.8 billion.
- Current account deficit for February is projected at $4.8 billion.
- The 2025 year-end CAD forecast was revised upward to $22 billion (1.5% of GDP) from $15 billion (1% of GDP) due to:
- Continued real appreciation of the Turkish lira, albeit at a slower pace than 2024.
- Sustained increase in consumption goods imports.
- Weak demand in key export markets.
