Türkiye’s current account balance posts 2nd straight surplus

Türkiye’s current account balance registered a surplus for the second consecutive month in October, official data showed Monday.

The balance posted a surplus of $186 million last month, the Central Bank of the Republic of Türkiye (CBRT) said. In September, the current account surplus was $1.91 billion, driven by strong tourism revenues and a narrower trade deficit.

The current account is the most complete measure of trade because it includes investment flows and trade in merchandise and services. A deficit means Türkiye is consuming more from overseas than it is selling abroad.

The September-October readings mark the first two straight surpluses since a four-month streak between July and October 2021.

The balance was expected to record a surplus of around $750 million, according to a Reuters poll. The forecasts of the 10 economists polled ranged from a surplus of $250 million to $850 million.

Excluding gold and energy, the balance saw a net surplus of $5.1 billion in October, the central bank said.

Goods deficit came in at $4.9 billion, while services recorded a net surplus of $6.04 billion – travel items under services indicated a net inflow of $4.75 billion.

“Primary income recorded a net outflow of $1,001 million, whereas secondary income indicated a net inflow of $18 million,” the bank added.

Direct investments in October totaled $638 million.

Since June, the central bank has hiked its benchmark policy rate to 40% from 8.5% and pledged further tightening to fight inflation, while the government has introduced tax and fee hikes to boost budget income.

The government also introduced measures to cap strong domestic demand, one of the main reasons for higher imports and to boost investments and exports to ensure improvement in current account balance.

Ankara said in September it expects a deficit of $42.5 billion this year, from last year’s $48.8 billion, which was largely driven by energy and gold.

The median forecast for the full-year deficit in the Reuters poll was $45.4 billion, with estimates ranging between $42 billion and $47 billion.

The forecasts in the government’s economic roadmap see the shortfall falling to around $34.7 billion, or 3.1% of gross domestic product (GDP), in 2024, down from about 4% projected for this year.

Treasury and Finance Minister Mehmet Şimşek earlier said the shortfall is expected to shrink to around $40 billion in December due to a slowdown in consumer loan growth and a sharp rise in tourism revenues.