Turkey: Current account swings to surplus for first time in 20 months in June
The current account posted a USD 0.7 billion surplus in June, improving from the USD 7.8 billion deficit booked in May (June 2022: USD 2.6 billion deficit). June’s surplus was the first in 20 months, and was largely due to a surge in tourism. However, in the 12 months leading up to June, the current account posted a USD 56.5 billion deficit, compared to the USD 59.7 billion deficit logged in May.
The merchandise trade balance improved from the previous month, recording a USD 3.7 billion deficit in June (May 2023: USD 10.5 billion deficit). Merchandise exports dived 12.5% year on year in June, contrasting May’s 12.2% jump. Meanwhile, merchandise imports slid 19.0% over the same month last year in June (May: +14.5% yoy), marking the weakest reading since May 2020.
Analysts at EIU said:
“We expect the contribution of net tourism income to the current-account balance to increase by US$5bn in 2023. Together with the impact of tighter policymaking and the weak lira on the trade balance, this will help to contain the soaring current-account deficit, which we still expect to come in at about 5.4% of GDP this year. Growth in tourism is likely to moderate in 2024.”