Turkey’s current-account deficit decreased significantly in August, falling by almost 90% compared to the previous month. This can be attributed to the booming tourism industry, which helped offset the trade gap. According to data released by the central bank, the overall deficit in trade and investment with the rest of the world reached $619 million in August, down from a revised deficit of $5.5 billion in July. Economists had expected a gap of $550 million in August.
The improvement in the current-account deficit was largely driven by a significant increase of nearly $1 billion in travel income compared to July. This resulted in a net surplus in services of $7.3 billion, which helped compensate for a goods deficit of $7.1 billion.
Turkey’s external finances have been improving as the government implements tighter domestic policies to control consumer demand and address economic imbalances. However, there is concern that the end of the tourism season and the continued strong imports of gold and energy may expose Turkey’s trade vulnerabilities once again.
According to the government’s medium-term program, Turkey is expected to run a current-account deficit of 4% of gross domestic product this year. Turkish Finance Minister Mehmet Simsek stated that the deficit is projected to narrow as the country “rebalances” economic growth, partially due to the support provided to exports.
In addition to the boost from tourism, the current-account balance in August also benefited from an increase in official reserves and capital inflows of unknown origin.
I have over 10 years of experience in the field of cryptocurrency and blockchain technology. I have attended numerous conferences and events around the world, and my work has been featured in major publications such as CoinDesk, Bitcoin Magazine, and Yahoo Finance.