Current account posts $1.9 billion surplus in September

ANKARA

The current account posted a surplus of $1.88 billion in September after producing deficits in the previous two months, data from the Central Bank have shown.

Economists had expected a current account surplus of $1.37 billion in September.

In August and July, the deficits were $357 million and $5.6 billion, respectively.

Gold and energy excluded in the current account indicated a net surplus of $7.2 billion in September, the Central Bank said on Nov. 13.

Goods deficit shrank from $7.1 billion in August to $3.7 billion with exports rising from $21.1 billion to $21.8 billion and imports declining from $28.3 billion to $25.5 billion.

The travel item recorded a net inflow of $5 billion, down from August’s $6.1 billion. Net inflows under the travel item amounted to $32 billion in the January-September period, rising from $28.6 billion from a year ago.

Tourism revenues, one of the main sources of hard currency, increased more than 20 percent year-on-year in the first nine months of 2023 to $42 billion, the Turkish Statistical Institute (TÜİK) reported last month.

Direct investments reversed course in September, according to the Central Bank data. In the month, direct investments recorded a net outflow of $337 million versus a net inflow of $104 million in August.

From January to September, net direct investments stood at $2.3 billion, falling from $6.5 billion from the same period of last year.

Portfolio investment recorded a net inflow of $1 billion in the month.

“As regards to sub-items of liabilities, non-residents’ transactions on equity securities recorded net sales of $263 million, government domestic debt securities recorded net purchases of $90 million,” the bank said.

Official reserves increased by $7.7 billion in September, but they declined by $11 billion in the first 10 months of 2023.

The 12-month rolling current account deficit declined from $56.6 billion in August to $51.7 billion.

'Rebalancing economy'

The current account deficit is expected to decline due to the steps taken toward rebalancing the economy and the normalization of gold imports, as well as natural gas and crude oil production activities, Finance Minister Mehmet Şimşek said at an event in Istanbul at the weekend.

The strong tourism revenues will also contribute to this process, he added.

The current account deficit is forecast to decline to around 4 percent of GDP in 2023, and it will further decline to 2.3 percent in 2026, according to the minister.

“Along with the increasing confidence in our country, we see the reflection of the improvement in external financing opportunities in the strengthening of reserves.”