Türkiye posted a slightly larger-than-expected current account deficit in December but has seen the full-year gap narrowing significantly in 2024 compared to a year earlier, official data showed on Thursday.
The balance registered a shortfall of $4.65 billion (TL 167.93 billion) in December 2024, the data from the Central Bank of the Republic of Türkiye (CBRT) revealed. It came in above expectations of an Anadolu Agency (AA) survey that expected the deficit to be nearly $3.7 billion and the Reuters poll forecast of $4 billion.
From January through December, the balance posted a gap of slightly below $10 billion, markedly less compared to $39.9 billion in 2023, according to the CBRT data.
In December, the current account, excluding gold and energy, indicated a net surplus of $2.46 billion, while the goods deficit recorded $6.24 billion, the central bank said.
"According to annualized data, the current account deficit increased almost to $10.0 billion in December, while the goods recorded a deficit of $56.3 billion," the CBRT said.
"In the same period, services and secondary income realized a surplus of $62.0 billion and $72 million, respectively, while the primary income recorded a net deficit of $15.8 billion," it added.
In 2024, the current account deficit was mainly financed through direct investments with a net inflow of $4.7 billion, portfolio investments with a net inflow of $11.7 billion and loans with a net inflow of $26.2 billion, the bank said.
"However, the currency and deposits item, along with trade credits, had a negative impact on the current account deficit, amounting to $14.0 billion and $5.4 billion, respectively. Meanwhile, reserves increased by $0.5 billion on a net basis during 2024," it added.
In December alone, the direct investment recorded a net inflow of $1.14 billion, the central bank also said.
According to economist Haluk Bürümcekçi's calculations, the current account deficit-to-GDP (gross domestic product) ratio fell to around 0.7% in 2024 from 3.6% the previous year. Türkiye's long-term average current account deficit is around 3%.
The government's medium-term program forecasts a current account deficit-to-GDP ratio of 1.7%.
Commenting on the data, Trade Minister Ömer Bolat hailed the "great contributions" of the decline and the progress in the current account deficit last year.
"The rapid decline and balancing process recorded in the current account deficit in 2024 made great contributions to the increase in our international credibility, financial stability, the reduction of external debt need, the fight against inflation, and macroeconomic stability," he said in a post on X.
He noted that the current account, excluding gold and energy, maintained its strong course with a surplus of $52.7 billion in 2024.
"Thus, the ratio of the current account deficit to gross domestic product fell below 1%," he added.
