Türkiye’s current account deficit exceeds $4B, surpassing expectations

Türkiye recorded a current account deficit of $4.65 billion in December, exceeding market expectations of $4 billion, the Central Bank of the Republic of Türkiye (CBRT) reported on Thursday.

According to CBRT, the current account balance, excluding gold and energy, posted a surplus of $2.466 billion. The trade deficit, defined under the balance of payments, stood at $6.24 billion.

Service sector inflows contributed positively to the balance, with net income from services reaching $3.15 billion in December. Transportation and travel services played a major role, generating net revenues of $1.46 billion and $2.14 billion, respectively.

According to annualized data, the current account deficit for December stood at approximately $10 billion, while the balance of payments-defined trade deficit reached $56.3 billion. The services balance posted a surplus of $62 billion, the secondary income balance recorded a surplus of $72 million, and the primary income balance showed a deficit of $15.8 billion.

Foreign currency deposits increase, Turkish lira decreases

The primary income balance recorded a net outflow of $1.67 billion, partially offsetting the positive impact of service revenues on the current account balance.

Under other investments, foreign banks’ foreign currency deposits in Türkiye increased by a net $512 million, while deposits in Turkish lira decreased by $268 million. Overall, net inflows under this item amounted to $244 million.

Official reserves declined by a net $1.55 billion in December.

Commenting on the data in a post on X, Trade Minister Omer Bolat stated that the current account deficit decreased from $39.9 billion in 2023 to $10 billion in 2024, indicating an improvement.

“Thanks to measures aimed at boosting goods and services exports and reducing imports, a significant decline in the current account deficit has been achieved,” he said.

Bolat added that the positive developments in the current account balance contributed to a decline in Türkiye’s risk premium and strengthened foreign exchange reserves, supporting macroeconomic stability and aiding the disinflation process.