Current account balance posts $3.8 billion deficit in January

ANKARA

Türkiye’s current account deficit widened to $3.8 billion in January from $2.3 billion a year ago, data from the Central Bank showed on March 12.

“We anticipate that the current account deficit will increase in the coming period but remain at a sustainable level throughout the year, staying below 2 percent of GDP and the medium-term program’s projection of $28.6 billion [for 2025],” Finance Minister Mehmet Şimşek said, commenting on the latest data.

The ratio of gross external financing needs to GDP improved by 5.4 points over the past two years, partly due to the decline in the current account deficit, dropping below the long-term average of 18.6 percent, he wrote on X.

“Thus, we have significantly eliminated the vulnerabilities related to the external balance and made our economy more resilient and stronger,” he said.

We will continue to reduce the need for external financing and improve the quality of financing with a sustainable current balance,” Şimşek added.

The goods deficit increased to $5.56 billion in January from $4.35 billion a year ago, according to the bank data. Exports rose to $21.1 billion from $19.7 billion, but imports were up to $26.7 billion from $24.06 billion.

January’s current account gap was higher than the market expectation of a $3.24 billion deficit.

Excluding gold and energy, the current account balance indicated a net surplus of $2.4 billion in January, the bank said.

The annualized data showed that the current account deficit was $11.54 billion as of January, up from $10 billion in December 2024.

The 12-month goods deficit also moved to $57.6 billion in January from $56.5 billion.

In the same period, services and secondary income realized a surplus of $61.9 billion and $101 million, respectively, while the primary income recorded a net deficit of $16 billion, according to the bank.

“As regards the annualized figures, the current account deficit was mainly financed through direct investments with a net inflow of $4.5 billion, portfolio investments with a net inflow of $13.7 billion and loans with a net inflow of $37 billion,” the bank said.

Direct investment recorded a net inflow of $504 million in January. Non-residents recorded a net inflow of $1.4 billion and residents’ external assets increased by $910 million.

Portfolio investment recorded a net inflow of $2.2 billion.

Non-residents’ investments in equity securities and the government domestic debt securities market recorded net purchases of $12 million and $1.65 billion, respectively.

Net inflows from the services amounted to $3.08 billion in January, with net revenues from transportation services and travel items reaching $1.44 billion and $2.38 billion, respectively.

Official reserves decreased by $6.43 billion, the bank said.