Turkey’s Current-Account Deficit Narrows Sharply on Tourism

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Turkey’s current account remained in deficit for a 20th month but the shortfall narrowed sharply with a surge in services income, driven by gains in tourism.

The gap was $1.13 billion in June, down from a revised $3.2 billion in May and $3.1 billion a year earlier, the Turkish central bank said on its website on Friday.

The deficit was in line with expectations in a Bloomberg survey, where the median estimate predicted a shortfall of $1.15 billion. The 12-month rolling shortfall narrowed to $29.7 billion.

Key Insights

  • Official reserves rose by $8.8 billion in June from a month earlier as portfolio inflows reached $2.8 billion and foreign direct investment stood at $796 million
  • Net errors and omissions, capital movements categorized as coming from an unknown origin, stood at $2.9 billion
  • Balance of trade in services posted a $1.5 billion surplus, from a gap of $346 million in 2020, highlighting the role of recovery in tourism and other services in the improvement in Turkey’s foreign imbalance

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  • The gap in trade of goods reported in the balance of payments data was $1.6 billion, compared with a little over $3 billion in May

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