Turkey’s current account turned to deficit in November – Reuters poll

ISTANBUL (Reuters) – Turkey’s current account is expected to record a deficit of $1.7 billion in November, after two months of surplus, and the deficit was seen at $45 billion at end-2023, a Reuters poll showed on Monday.

The current account forecasts of the 12 economists polled ranged from a deficit of $1 billion to $2 billion.

The trade deficit, a major component of the current account, declined 32.6% year-on-year in November to $5.92 billion, from earlier average levels around $10 billion.

The current account balance recorded a surplus of $1.88 billion in September and $186 million in October due to tourism revenues and a narrower trade deficit.

Although energy imports stayed roughly the same in November, tourist visitor numbers declined for seasonal reasons, Goldman Sachs said in a note, accounting for most of the decline in the current account.

“Given sizeable deficits in H1, we continue to expect the overall current account deficit to reach 4.1% of GDP in 2023… Looking ahead, we forecast the current account deficit to fall to a below consensus 1.8% of GDP in 2024 reflecting the rebalancing in domestic demand,” Goldman Sachs also said.

The median forecast for the full-year deficit was $45 billion, with estimates ranging between $43.5 billion and $45.7 billion.

Since June, the central bank has hiked its policy rate to 42.5% from 8.5% and pledged to fight inflation, while the government has introduced tax and fee hikes to boost its budget income.

It also introduced measures to cap strong domestic demand, one of the main reasons for higher imports, and to boost investments and exports to ensure improvement in current account balance.

Ankara said in September it expects a deficit of $42.5 billion this year, from last year’s $48.8 billion, which was largely driven by energy and gold.

The central bank is scheduled to announce November current account data at 0700 GMT on Jan 12.

(Reporting by Ezgi Erkoyun, Jonathan Spicer and Vijayalakshmi Srinivasan; Editing by Jonathan Spicer)