Türkiye’s current account deficit widened to about $3.7 billion in November, official data showed Wednesday, propelled by soaring cost of energy imports and rapid increase in gold trade.
Although the shortfall remained on an expansionary path, the better-than-expected monthly reading showed some loss of momentum in the pace of widening.
The 12-month rolling deficit amounted to $45 billion, or approximately 5.2% of Türkiye’s gross domestic product (GDP), data by the central bank showed. It marked the highest reading since August 2018.
In October, the current account deficit was $352 million. The November figure widened from a downwardly revised deficit of $2.1 billion in November 2021.
The reading came in less than a Reuters forecast for a November deficit of $4.1 billion.
A higher energy trade gap that came in at $6.5 billion, versus $5.7 billion a year ago, and a $2.4 billion deficit in net gold trade, compared to a $600 million surplus in 2022, were the key drivers of the November reading.
The shortfall in trade of goods reached $7.12 billion, the data showed. On the other hand, services income remained strong with an over 46% year-over-year increase. The services posted a net surplus of $3.68 billion, the data showed.
The surplus in core trade, excluding gold and energy, slightly increased and limited the deterioration in the current account. The gold- and energy-excluded current account posted a nearly $5.3 billion surplus.
Net errors and omissions, or capital movements of unknown origin, showed monthly inflows of about $900 million, bringing inflows during the January-November period to around $22.3 billion.
Official reserves recorded a $3.6 billion increase in November, the data showed.
The year-end forecasts were revised higher throughout the year because of a potential further decline in exports and the expectation that energy prices will remain elevated. However, the year-end median of the surveys declined in the last couple of months.
The median forecast in the Reuters poll for the deficit in 2022 stood at $48 billion, down slightly from a previous survey, with estimates ranging between $43 billion and $49 billion.
In 2021, Türkiye’s current account deficit was $14.88 billion.
Ankara sees the deficit at $47.3 billion this year, according to official forecasts announced in September, which would be the highest since 2013 when the deficit was more than $55 billion.
Under the government’s new economic plan, authorities are working to turn Türkiye’s chronic current account deficits into a surplus, which the central bank says will help establish price stability.
Global energy prices have clouded that goal though authorities say a surplus will be achieved when energy prices normalize. In the three-year economic forecasts, the government sees the deficit narrowing only to $10 billion in 2025.