Turkey Current Account September 2018


Turkey: Current account balance records another surplus in September

November 12, 2018

The current account balance recorded a USD 1.8 billion surplus in September, down marginally from August’s revised USD 1.9 billion surplus (previously reported: USD 2.6 billion surplus) but still significantly improved from the USD 4.4 billion deficit observed in the same month last year. After deteriorating in annual terms for a prolonged period due to government stimulus measures, the current account balance has improved markedly since June due to the weaker lira and softer domestic demand.

September’s figure was underpinned by a substantial reduction in the goods deficit, which narrowed year-on-year from USD 6.7 billion to USD 0.8 billion. In addition, the trade surplus in services broadened year-on-year from USD 3.1 billion to USD 3.5 billion, largely on greater tourism revenue.

On the financing front, there were USD 4.9 billion of net capital outflows in September, following a large USD 14.3 billion of net outflows in August. This was a result of net outflows of portfolio investment, and an increase in banks’ currency and deposits held abroad amid lingering lira weakness.

According to Muhammet Mercan, ING’s chief economist for Turkey:

“September data shows that outflows have lost momentum in comparison to August, becoming less of a market concern. However, the outlook will likely remain challenging given sizeable total external financing needs in the period ahead mostly due to private debt amortization. […] given the ongoing loss of momentum in the economy and a weaker Turkish lira, [the] trade balance is likely to recover, indicating we'll see further improvement in the external deficit.”

Turkey Current Account Balance Forecast

Next year, the weaker lira and soft domestic demand should help strengthen the country’s external position. FocusEconomics Consensus Forecast panelists see the current account deficit at 3.5% of GDP in 2019 and 3.8% of GDP in 2020.

Author:, Economist

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Turkey Current Account Chart

Turkey Current Account September 2018 0

Note: Monthly and 12-month sum of current account balance in USD billion.
Source: Central Bank of the Republic of Turkey (CBRT).

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