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Turkey’s current account forecast to hit $43.5bn in 2023

Turkey lira Reuters
Amundi's tentative optimism is balanced by upcoming nationwide local elections in March

Turkey is expected to record a current account deficit of $10 billion in January on the back of gold imports, a Reuters poll showed, while the deficit was seen at $43.5 billion in 2023.

In a Reuters poll, the median estimate of 11 economists for the current account deficit in January was $10 billion, with forecasts ranging from $6 billion to $11.1 billion.

Turkey’s trade deficit, a major component of the current account, widened 38 percent in January to $14.24 billion, data showed, mainly due to the sharp rise in gold imports and surging cost of energy imports.

A rise in household demand for gold has been seen because of traditional patterns of buying and recent high inflation.

According to data from statistics institute, the trade deficit, excluding energy and gold, stood at $1.79 billion in the same period.

The median forecast of six economists for the deficit in 2023 stood at $43.5 billion, with estimates ranging between $35 billion and $50 billion.

Ankara sees the deficit at $22 billion this year, according to official forecasts announced in September. In 2022 the deficit stood at $48.8 billion, largely due to heavy energy bills and gold imports.

Under President Tayyip Erdogan’s new plan, authorities are working to turn Turkey’s chronic current account deficits to a surplus, which the central bank says will help to establish price stability.

Economists are monitoring the impact of the massive earthquakes that hit the country’s southeast, as well as the course of energy and gold imports after authorities introduced measures to limit gold imports last month.

The earthquakes led to a drop of $1.5 billion in exports in February, trade ministry data showed, contributing to a 52.8 percent surge in the trade deficit year on year to $12.19 billion.

Turkey’s central bank is scheduled to announce the January current account data on March 13.