Turkey’s current account deficit narrows to $1.71 billion in April

Turkey’s current account deficit narrowed by 67.7 percent in April as the foreign trade balance improved, central bank data showed on Monday.

The deficit declined to $1.71 billion from $5.3 billion in April 2020, when the first outbreak of COVID-19 led to the closure of most businesses.

The deficit was expected at $2.2 billion, according to the median estimate in a Reuters poll of 11 economists published last week. Estimates ranged from $1.95 billion to $3 billion.

The decrease was mostly due to a narrowing in the goods deficit, which fell by 60.7 percent to $1.51 billion, and a positive balance of $811 million in services. That compared with a deficit of $339 million a year earlier.

Turkey is seeking to boost exports to help narrow the current account deficit, which widened to 5.1 percent of GDP last year. The country has traditionally financed any shortfall through foreign capital inflows such as tourism revenue or investment. Both have shrunk over the past year, pressuring the value of the lira, which has weakened to successive record lows against the dollar and euro.

The current account balance, excluding gold and energy, posted a surplus of $942 million compared with a deficit of $3.55 billion a year earlier, the central bank said.

The 12-month rolling current account deficit narrowed to $32.7 billion, equivalent to 4.5 percent of recorded gross domestic product. It had stood at $36.19 billion in the 12 months to March.

A net $1.53 billion of portfolio investment exited the country during April. Turkey’s official reserves recorded a net outflow of $1.18 billion.