Turkey’s June current account deficit set for $3.4bn, says poll

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• Trade deficit soared 184.5% in June 2022 to $8.17 billion
• Deficit seen at $40.15 billion for full year 2022
• Economists revising up forecasts on surging energy prices

Turkey’s current account is expected to record a deficit of $3.4 billion in June and end the year with a deficit of more than $40 billion, a Reuters poll showed on Friday, as soaring energy prices widen the shortfall.

The trade deficit, a major component of the current account balance, soared 184.5 percent in June to $8.17 billion, mainly due to Turkey’s hefty energy import bill.

In a Reuters poll of 11 economists, the median estimate for the current account deficit in June was $3.4 billion, with forecasts ranging from $2.35 billion to $5.2 billion.

The deficit was seen at $40.15 billion for 2022 as a whole, with the range of forecasts between $35 billion and $51 billion.

Economists have been revising up their forecasts for the 2022 deficit due to surging energy prices. The median forecast was $29 billion five months ago and $40.30 billion in last month’s poll.

Under President Tayyip Erdogan’s economic plan, which prioritises growth, exports and employment, with low interest rates, the central bank has cut its policy rate by 500 basis points since September, triggering a currency crisis that saw the lira lose 44 percent against the dollar last year.

The government says Turkey’s chronic current account deficit, which stood at $14.9 billion last year, will turn to a surplus under the plan.

However, Turkish exporters are revising down year-end targets in a move that could derail the government’s plans as new orders drop amid signs of a global slowdown and inflationary pressure.

Turkey’s central bank is scheduled to announce the June current account data at 0700 GMT on Aug. 11.