UPDATE - Türkiye's current account deficit at 7-month low

UPDATE WITH REMARKS FROM TURKISH FINANCE MINISTER

By Tuba Ongun

Türkiye's current account balance ran a $1.24 billion deficit in May, the lowest since last October, according to central bank data released on Friday.

The figure was significantly down from a $5.44 billion deficit in April and $7.78 billion in May 2023, the bank’s data showed.

The gold- and energy-excluded current account saw a $3.26 million surplus in the month, the bank said.

The goods deficit for the month reached $4.2 billion, while the services sector ran a net surplus of $4.72 billion. Under the services sector, travel had a net inflow of $3.92 billion in May.

In January-May, the current account balance recorded a $17.6 billion deficit, down from $32.4 billion in the same period last year.

"Stability, confidence and resilience are increasing, and the current account deficit is becoming no longer a major problem," Mehmet Simsek said on the X platform.

He stressed that foreign debt to GDP ratio is also falling down, while official reserves of the central bank are growing.

The country's 12-month rolling deficit amounted to $25.2 billion in May, marking its lowest level since June 2022, he said.

Simsek also pointed out the upward trend in external financing, as the portfolio investments hit $19.1 billion in the first five months of this year.

"The government expects the current account deficit to GDP ratio to fall below 2.5% in the second quarter of this year," he said, adding: "We will achieve a sustainable current account deficit by economic transformation through structural reforms. Thus, we will permanently reduce our country's external financing needs."