Turkey: Current account posts narrower deficit in October
The current account posted a USD 0.4 billion deficit in October, improving from the USD 2.9 billion deficit clocked in September (October 2021: USD 4.1 billion surplus). Meanwhile, the 12-month trailing current account deficit , coming in at USD 43.5 billion in October (September: USD 39.0 billion deficit).
The merchandise trade balance improved from the previous month, recording a USD 6.5 billion shortfall in October (September 2022: USD 8.1 billion deficit). Merchandise exports increased 1.7% over the same month last year in October (September: +7.7% year-on-year). Octobers figure marked the weakest increase since January 2021. Meanwhile, merchandise imports soared 32.6% over the same month last year in October (September: +38.9% yoy), marking the weakest reading since December 2021.
Current account balance pressures will remain in place next year. The import bill has increased due to the war in Ukraine and a weaker currency. Meanwhile, the Central Bank pursues an accommodative monetary policy stance at a time of red-hot inflation. Looming recessions in the European Union and the United States further cloud the outlook.