Decline in current account deficit likely to continue, says VP Yılmaz

MERSİN

Türkiye’s current account deficit is likely to continue to decline in the months to come, Vice President Cevdet Yılmaz has said.

Speaking at an event in the southern province of Mersin, Yılmaz noted that the current account deficit climbed to $60 billion in mid-2023, but it fell to around $45.2 billion at the end of last year, adding that export and tourism revenues greatly helped reduce the current account gap.

“We expect the decline in the current account deficit to continue. We are addressing this structural problem by taking measures in the energy sector and encouraging foreign exchange earning activities,” he said.

When preparing the medium-term economic program, the government identified the current account deficit is one of the major issues to be tackled, Yılmaz noted. “We saw some positive results starting from the second half of last year.”

Türkiye aims to welcome 60 million tourists and generate $60 billion in tourism revenues this year, up from 2023’s $54.3 billion, the vice president recalled, saying that this would help reduce the current account deficit.

“We made a good start to 2024 with exports rising 3.6 percent and imports falling 22 percent in January. This showed the positive impact of trade on the current account balance.”

The government does not have an exchange rate target, the rate level is determined in the market, Yılmaz said, adding that the exchange rates have stabilized recently.

The Central Bank’ foreign reserves, which dropped to around $98 billion in May last year, have been rising, at one point reaching $145 billion.

“There is a slight decline [in foreign reserves] lately. But still, they are currently at $135 billion. We will continue to strengthen our reserves in the coming period,” Yılmaz said.