Current Account Balance at the Lowest Level of the Last 33 Months: Positive Economic Messages from Şimşek
Treasury and Finance Minister Mehmet Şimşek made evaluations on Turkey’s current account balance data for September. Şimşek emphasized that the current account deficit fell below 10 billion dollars and that this level is the lowest level in the last 33 months. Speaking in the light of the balance of payments data announced by the Central Bank of the Republic of Turkey (CBRT), Şimşek stated that the improvement continues.
Significant Reduction in Current Account Deficit
Minister Şimşek stated that the annual current account deficit has decreased by 46 billion dollars since May 2023 and this contraction has continued. Stating that the strong performance in the services balance and the narrowing foreign trade deficit supported this improvement, Şimşek announced that annual service revenues reached 112 billion dollars as of September. Şimşek said that this positive momentum in the current account balance is sustainable and contributes positively to the economy.
Strong Performance in External Financing
Şimşek also painted a positive picture on the external financing side. He stated that there was a portfolio inflow of 2.9 billion dollars in September and a total of 28 billion dollars in the first nine months of the year. He also pointed out that the external debt rollover ratios of banks and the real sector are 166 percent and 138 percent, respectively. He said that these ratios show that Turkey offers an attractive economic environment for international investors.
Decline in Proportion to National Income
Noting that the ratio of the current account deficit to national income has also declined, Şimşek explained that this ratio dropped to 0.8 percent in the third quarter of 2023 and that they expect this downward trend to continue in the last quarter of the year. The Minister emphasized that the improved current account balance and increased capital inflows support reserve accumulation and macroeconomic stability, which is an important development for the overall stability of the Turkish economy.
The Role of the Service Sector
Minister Şimşek emphasized the positive impact of the services sector on the current account balance. Stating that revenues from tourism were an important support factor, he said that revenues in this sector reached 112 billion dollars. The contraction in the foreign trade deficit and the rise in tourism revenues significantly eased the pressure on the current account deficit.
Supporting Macroeconomic Stability
Şimşek stated that the improving current account balance and strong capital inflows contributed to macroeconomic stability by increasing Turkey’s reserve accumulation. He also pointed out that these developments have increased the confidence of international investors in the Turkish economy.
Finally, Şimşek painted a positive outlook for the future of the Turkish economy and emphasized the importance of the steps to be taken to build a sustainable economic structure.
