Current account posts surplus in second straight month

ANKARA

Türkiye’s current account posted a surplus for the second consecutive month in October, the data from the country’s Central Bank have shown.

The current account produced a surplus of $186 million in October, which came on top of the $1.91bn surplus in the previous month.

“With our policies aimed at balancing growth, the current account balance posted a surplus in October, and the annualized deficit decreased by $9.6 billion compared to May,” Finance Minister Mehmet Şimşek wrote on X, formerly Twitter, on Dec. 11, commenting on the latest numbers.

Thanks to the decline in the current account balance and the increasing international investor interest in Türkiye, the country’s reserves reached their historically high level of $140 billion, Şimşek added.

“With the policies we implement, we reduce vulnerabilities and establish sustainable growth focused on investment, employment, production and exports… We see the results of the policies every day, and our program goals will continue to be met one by one,” the minister said. 

But he warned that the biggest disadvantage in this period is the weak demand from Türkiye’s trading partners, which limits export growth.

“The course of industrial production reflects this,” Şimşek said.

Türkiye’s industrial production increased 1.1 percent year-on-year in October, slowing from the 4.1 percent rise in the previous month, separate official data showed on Dec. 11.

Gold and energy excluded, the current account indicated a net surplus of $5.1 billion, according to the numbers the Central Bank released on Dec. 11.

The goods deficit was $4.9 billion, with exports and imports amounting to $22.4 billion and $27.3 billion, respectively.

Travel items recorded a net inflow of $4.75 billion in October, while the net inflows under this item stood at $36.8 billion in the first 10 months of 2023, up from $33.4 billion a year earlier.

Direct investment recorded a net inflow of $638 million against an outflow of $336 million in September. The net direct investment inflows stood at $2.92 billion in the January-October period.

The outflows under portfolio investments were $689 million in October, reversing the net inflows of more than $1 billion in September.

“As regards sub-items of liabilities, non-residents’ transactions on equity securities and government domestic debt securities recorded net sales of $423 million and $16 million, respectively,” said the Central Bank.

Non-resident banks’ deposit accounts held within domestic banks increased by $1.3 billion, with an increase of $1.1 billion in foreign currency and $198 million in Turkish Lira accounts.

The current account deficit was $40.68 billion in January-October, rising from the deficit of $39 billion in the same period of 2022.