Türkiye Achieves Highest Current Account Surplus in Five Years
In a significant economic development, Türkiye has reported its highest current account surplus in five years, amounting to $4.3 billion in August. This surge is primarily attributed to a remarkable increase in tourism revenues, which have effectively offset the country’s trade deficit. The current account surplus, a crucial indicator of the balance of trade and investment flows, saw a substantial rise from a revised surplus of $778 million in July. Economists had anticipated a smaller surplus of $4.2 billion, making this figure particularly noteworthy.
The services sector played a pivotal role in this economic turnaround, with a net surplus of $8.7 billion reported. In contrast, the goods sector faced challenges, recording a deficit of $2.9 billion. This shift in the current account indicates that Türkiye’s stringent monetary policies have successfully curbed demand for foreign goods by elevating borrowing costs and limiting domestic credit growth. Notably, gold imports, which previously exacerbated the trade deficit as citizens sought refuge from inflation, have also decreased this year.
Economist Haluk Burumcekci from Istanbul highlighted that while the restrictive monetary policies have impacted consumer goods imports minimally, the overall decline in imports is primarily due to reduced imports of intermediate goods and capital. Despite these positive trends, the Turkish lira remains under pressure, ranking among the worst-performing emerging-market currencies. This situation reflects ongoing global market volatility and a heightened demand for dollars among local citizens, underscoring the fragile confidence in the local currency, despite government efforts to encourage lira savings.
To maintain a sustainable trade surplus, experts emphasize the need for comprehensive fiscal measures aimed at curbing growth driven by domestic demand. This includes strategies to limit public spending, alongside continued monetary and macroeconomic policies.
