Current account deficit narrows in December

The current account recorded a USD 2.1 billion deficit in December, improving from the USD 2.8 billion deficit clocked in November (December 2022: USD 6.0 billion deficit). Meanwhile, the 12-month trailing current account deficit improved, coming in at USD 45.2 billion in December (November: USD 49.1 billion deficit). The merchandise trade balance deteriorated from the previous month, recording a USD 4.6 billion shortfall in December (November 2023: USD 4.5 billion deficit). Merchandise exports fell 0.9% annually in December, on the heels of November’s 3.0% rise. Meanwhile, merchandise imports slid 12.0% on an annual basis in December (November: -7.0% yoy).

Analysts at the EIU commented on the outlook: “We expect policy to be sufficiently tight in 2024 to limit domestic demand and lower the current-account deficit to about 3% of GDP, and to attract sufficient capital inflows to finance the deficit […] There is a risk of political pressures for more expansionary policies, particularly before the local elections in March. Weak export markets and/or a rise in global oil prices could also negatively affect the current-account deficit”

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