Türkiye posts $4.3 billion of current account surplus

ANKARA

Türkiye recorded a current account surplus of $4.32 billion in August, according to data from the Central Bank on Oct. 11.

This marked the largest current account surplus since 2019 and was in line with market expectations.

“The decline in the current account deficit and the strong outlook in external financing strengthen our macro-financial stability and increase the resilience of our economy,” Finance Minister Mehmet Şimşek commented on the current account data.

The current account deficit declined below 1 percent of GDP, Şimşek said on X, noting that the external debt rollover ratios of banks and the real sector were 167 percent and 132 percent, respectively.

In June and July, the current account surplus was $756 million and $778 million, respectively, reversing the trend in the previous five months, when the current account balance posted deficits.

In the first eight months of 2024, the current account deficit was $9.67 billion, significantly lower than the deficit of $38.9 billion in the same period of 2023.

The 12-month cumulative current account deficit declined from $15.09 billion in July to $11.25 billion in August. In August last year, the 12-month trailing deficit was $51.84 billion.

The goods deficit was $2.9 billion in August, narrowing from July’s gap of $5.1 billion. Exports and imports were $21.8 billion and $24.7 billion, respectively, while the eight-month goods deficit fell from $68.6 billion last year to $38.6 billion.

Excluding gold and energy trade the current account indicated a net surplus of $9.01 billion, the Central Bank said in a statement.

The travel item recorded a net inflow of $6.79 billion, while net inflows in the first eight months of the year amounted to $30.6 billion.

Portfolio investment recorded a net outflow of $881 million in August, after a net inflow of $3.7 billion in the previous month.

Portfolio inflows amounted to $15 billion in January-August, well above the inflows of $927 million in the same period of last year.

“As regards to sub-items of liabilities, non-residents’ transactions on equity securities recorded net sales $627 million and government domestic debt securities recorded net purchases of $1,41 billion [in August],” the bank said.

Direct investment recorded a net outflow of $62 million in August against an inflow of $676 million in July. Direct investments in Türkiye stood at $2.62 billion in the first eight months of 2024, lower than $2.9 billion in the January-August period of 2023.

Non-resident banks’ deposit accounts held within domestic banks decreased by $374 million, with an increase of $786 million in foreign currency and a decrease of $1.16 billion in Turkish lira accounts.

Official reserves decreased by $2.51 billion in August, the bank said in the statement.