Turkey’s Current Account Deficit Decreases and Reserves Strengthen, Says Vice President Cevdet Yılmaz
According to statements by Turkey’s Vice President, Cevdet Yılmaz, the country has seen a significant reduction in its current account deficit and a bolstering of its reserves. As of May 2024, the annualized current account deficit has decreased by $31.8 billion, falling to $25.2 billion compared to May 2023.
During the January-May 2024 period, the improvement in the current account stood at $19.8 billion compared to the same period last year. This notable improvement in the current account balance is largely attributed to a decrease in the trade deficit and an increase in service revenues.
In the January-May 2024 period, the trade deficit defined by the balance of payments decreased by a total of $20.8 billion compared to the same period of the previous year. In May, alongside increased service revenues, the balance of goods and services turned positive after six months.
In May 2024, excluding the net errors and omissions item, international inflows reached their highest level at $14.4 billion. Due to increased inflows and a reduced current account deficit, reserves surged by $17.6 billion in May.
It has been indicated that, in the upcoming period, an increase in goods and services revenues is expected, and the current account deficit as a proportion of national income may perform better than the Medium-Term Program (OVP) expectations, potentially falling below 2.5%. Besides reducing the current account deficit, an aim to enhance the quality of deficit financing and reserves through increased direct foreign investments is also highlighted.