Turkey: Current account swings to deficit in July
The current account recorded a USD 5.5 billion deficit in July, deteriorating from the USD 0.7 billion surplus posted in June (July 2022: USD 3.5 billion deficit). Meanwhile, the 12-month trailing current account deficit came in at USD 58.5 billion in July (June: USD 56.5 billion deficit).
The merchandise trade balance worsened from the previous month, recording a USD 10.5 billion shortfall in July (June 2023: USD 3.8 billion deficit). Merchandise exports climbed 6.5% on an annual basis in July (June: -12.7% year-on-year). Meanwhile, merchandise imports rose 8.7% in annual terms in July (June: -19.0% yoy).
Muhammet Mercan, chief economist at ING, commented:
“The outlook still remains challenging as the decline in global leading activity indicators increase the risk of a slowdown in exports. For the capital account, total flows have improved since the elections, with strong net errors and omissions. An ongoing pivot to a more conventional policy stance will likely be crucial for recovery in investor confidence and identified flows.”