Turkey: Current account deficit increases in April
The current account posted a USD 5.4 billion deficit in April, deteriorating from the USD 4.9 billion deficit recorded in March (April 2022: USD 2.5 billion deficit). Meanwhile, the 12-month trailing current account recorded a USD 57.8 billion deficit in April (March: USD 54.9 billion deficit).
The merchandise trade balance deteriorated from the previous month, recording a USD 7.0 billion shortfall in April (March 2023: USD 6.3 billion deficit). Merchandise exports plummeted 18.3% in annual terms in April (March: +3.2% year-on-year). The result marked the largest drop since May 2020. Meanwhile, merchandise imports declined 5.8% in annual terms in April (March: +1.9% yoy), marking the weakest result since January 2021.
Analysts at the EIU commented on the outlook:
“Attracting sufficient capital inflows to cover the deficit and service foreign debt without drawdowns of foreign-exchange reserves will remain a risk given the uncertainties relating to monetary and foreign policy. The sovereign increasingly relies on domestic financing (with support from the central bank), rather than tapping foreign funding sources.”