Decline in current account gap is program’s success: Şimşek

ISTANBUL

The decline in the annual current account deficit, which has been continuing for eight months, is the success of the economic program, Finance Minister Mehmet Şimşek has said.

The annualized current account deficit declined by $25.8 billion in March compared with June 2023, Şimşek said, commenting on the latest balance of payments data the Central Bank unveiled on May 13.

This improvement in the current account deficit suggests that the annual current account deficit has fallen around 2.7 percent of national income, according to the minister.

“With confidence in our program, our risk premium decreases and access to external financing increases,” Şimşek said, noting that capital inflows, excluding reserves — official and banking — were $20 billion above the annual current account deficit in March.

The improvement in the foreign exchange reserves will continue with the decline in the current account deficit and the positive outlook in external financing inflows, Şimşek added.

“Thus, macro-financial stability will be further strengthened, and a significant contribution will be made to the disinflation process,” the minister said.

In the medium-term economic program, the government forecasts that the current account deficit will decline to $34.7 billion or 3.1 percent of the estimated GDP in 2024. The current account deficit was $44.96 billion last year.

The government estimates that the current account gap will further shrink to $31.7 billion in 2025 and down to $30 billion in 2026, which will correspond to 2.6 percent and 2.3 percent of GDP, respectively.