Turkey’s current account likely to post $2.8b deficit in Jan.

Turkey’s current account is expected to have a deficit of $2.8 billion in January and is projected to reach $32 billion by the end of 2024, according to a Reuters poll showed on Thursday.

The trade deficit, a significant component of the current account, decreased by 56.4 per cent year-on-year in January to $6.23 billion due to government measures to reduce imports and increase exports.

The median forecast for the full-year 2024 deficit is $32 billion, with estimates ranging from $23.6 billion to $41.2 billion. The current account deficit was $48.8 billion in 2022, driven by energy and gold, and decreased slightly to $45.2 billion last year, surpassing the government’s forecast of $42.5 billion.

Economists anticipate an improvement in the current account deficit in 2024. The government predicted a deficit of $34.7 billion for this year in September.

The Turkish central bank raised its policy rate to 45 per cent from 8.5 per cent since June to combat inflation, and the government implemented tax and fee increases to boost budget revenue.

Measures have been introduced to control strong domestic demand, a key factor in increased imports, and to enhance investments and exports to enhance the current account balance.