Türkiye registered a smaller-than-expected current account deficit in February, according to official data on Wednesday, although it marked the highest monthly gap in seven months.

The shortfall stood at nearly $3.27 billion (TL 106.39 billion), the Central Bank of the Republic of Türkiye (CBRT) said, less than a market forecast for a deficit of $3.7 billion.

It compared to a revised $2.52 billion deficit in January and marked the highest level since the $5.7 billion gap in July 2023.

The deficit took the first two-month gap to almost $5.79 billion. The annualized shortfall came in at $31.8 billion in February, the data showed.

The February deficit fell by $5.8 billion compared to a year ago and marked an improvement of $28.3 billion from its peak in May 2023, said Treasury and Finance Minister Mehmet Şimşek.

The current account deficit in 2023 as a whole was $45.2 billion, down from $48.8 billion in 2022.

The fall in the deficit will support foreign exchange reserve accumulation and "will also contribute to disinflation through the macro-financial stability channel," Şimşek wrote on social media platform X, formerly known as Twitter.

He stated that they expect the decline to continue gradually in the coming months due to the impact of policies implemented to rein in inflation.

"This trend indicates that the current account deficit to gross domestic product (GDP) ratio may be below 2.5% by the end of the year," the minister added.

The current account is the most complete measure of trade because it includes investment flows and trade in merchandise and services. A deficit means Türkiye is consuming more from overseas than it is selling abroad.

Narrowing the current account gap and reaching a surplus were among the main goals of President Recep Tayyip Erdoğan's economic plan in recent years. However, sharply rising oil, gas and grain prices after Russia's invasion of Ukraine caused it to widen until mid-2023.

President Recep Tayyip Erdoğan also said on Tuesday evening that the current account deficit will be 2.5% of GDP at the end of the year.

Excluding gold and energy trade, the CBRT said the balance posted a surplus of $2.1 billion in February.

The goods deficit was at $4.75 billion in the month, while services saw a net surplus of $2.38 billion.

Travel, under services, recorded a net inflow of $1.96 billion in February.

The bank said direct investments posted a net inflow of $142 million.