The current account balance of Türkiye registered a larger-than-expected deficit in January to mark a third straight shortfall, official data showed on Wednesday.
The government still expects the balance to follow a sustainable course throughout the year, according to Treasury and Finance Minister Mehmet Şimşek.
The deficit for the month came in at nearly $3.8 billion (TL 139.06 billion), the Central Bank of the Republic of Türkiye (CBRT) said, compared to market projections of around $3 billion.
The deficit widened to $4.6 billion in December. The bank's data showed that the shortfall amounted to $2.3 billion in January 2024.
The current account is the most complete measure of trade because it includes not only goods and services but investment flows and other payments between Türkiye and the world.
Elaborating on the data, Şimşek said the current account deficit is expected to remain at a sustainable level throughout the year.
Şimşek emphasized commitment to reducing external financing needs and improving the quality of financing through sustainable current account balance and long-term resources.
The goods recorded a deficit of nearly $5.6 billion in January while services registered a net surplus of almost $3.1 billion.
Excluding gold and energy, the current account netted a surplus of $2.4 billion.
The primary income item recorded a net outflow of nearly $1.2 billion, increasing by $294 million compared to the same month of the previous year. It was driven by net portfolio investment expenditures, which rose by $381 million to reach $675 million.
Net inflows from the services amounted to almost $3.1 billion, with net revenues from transportation services and travel items reaching $1.4 billion and $2.4 billion, respectively.
The CBRT data showed the 12-month rolling current account gap came in at $11.5 billion in January. The goods recorded a deficit of $57.6 billion.
Services and secondary income posted a surplus of $61.9 billion and $101 million, respectively, while the primary income recorded a net deficit of $16 billion.
The overall shortfall narrowed to almost $10 billion in 2024 from nearly $40 billion a year earlier, with interest rate hikes and gold trade restrictions having driven the decline.
The ratio of the current account deficit to national income fell below 1% in 2024, compared to 3.5% in 2023. The government's medium-term program (MTP) forecast a current account deficit-to-GDP ratio of 1.7%.
Türkiye's long-term average deficit is around 3%. The deficit-to-GDP ratio is seen at about 2% for this year and at 1.3% for 2026.
"We expect the current account deficit, which we foresee increasing in the upcoming period, to remain at a sustainable level, below the annual MTP estimate of $28.6 billion and 2% of the national income," Şimşek wrote on social media platform X.
Şimşek emphasized that the ratio of gross external financing needs to national income has improved by 5.4 points over the past two years, thanks to the decline in the current account deficit, and has fallen below the long-term average to 18.6%.
This has significantly mitigated vulnerabilities related to external balance and made the economy more resilient, the minister noted.
Şimşek stated that they will continue to reduce external financing needs and improve the quality of financing with long-term resources in line with the goal of achieving a sustainable current account balance.
"We will continue to reduce external financing needs and improve the quality of financing through sustainable current account balance and long-term resources."
