Current account deficit remained below expectations in May

The Central Bank has announced the balance of payments data for May.

The current account deficit came in below expectations in May at 684 million dollars.

According to a Reuters survey, the current account deficit was estimated to decline to 830 million dollars in May, driven by a monthly decrease in imports and rising tourism revenues. According to the AA Finance survey, economists had projected that the current account would post a deficit of 1 billion 84 million dollars in May.

The current account had posted a deficit of 7.86 billion dollars in the previous month.

The current account last posted a surplus of 2.2 billion dollars in October, followed by seven consecutive months of deficits.

SUB-ITEMS OF THE BALANCE OF PAYMENTS

In May, the balance of payments-defined foreign trade deficit stood at 4.8 billion dollars.

According to annualized data, the current account deficit was approximately 16.0 billion dollars in May, while the balance of payments-defined foreign trade balance posted a deficit of 61 billion dollars. In the same period, the services balance posted a surplus of 62.2 billion dollars, while the primary and secondary income balances posted deficits of 17.2 billion dollars and 68 million dollars, respectively.

Net inflows from the services balance stood at 5.6 billion dollars this month, while net revenues from transport services and travel under this item were 1.8 billion dollars and 4.3 billion dollars, respectively.

In May, net direct investments contributed 4.6 billion dollars, loans 25.1 billion dollars, and trade credits 3.4 billion dollars to the financing of the annualized current account deficit; net portfolio investments had a negative impact of 3.8 billion dollars, and currency and deposits had a negative impact of 14.5 billion dollars on a net basis. The Central Bank's net reserve decrease in foreign currency was 15 billion dollars.

Net inflows from direct investments were recorded at 702 million dollars in May. While total direct investments by non-residents in Turkey increased by 1.3 billion dollars, direct investments by residents abroad increased by 675 million dollars.

REAL ESTATE INVESTMENTS CONTINUE TO POST A DEFICIT

When examining real estate investments, it was observed that residents purchased 238 million dollars worth of real estate abroad, while non-residents purchased 171 million dollars worth of real estate in Turkey on a net basis.

PORTFOLIO INVESTMENTS

Portfolio investments recorded a net inflow of 2.5 billion dollars in May.

It was observed that non-residents made net purchases of 396 million dollars in the stock market and 2.6 billion dollars in the GDS (Government Debt Securities) market.

Regarding bond issuances abroad; it is observed that non-residents made net purchases of 916 million dollars and 161 million dollars in General Government and real sector bonds, respectively, and net sales of 238 million dollars in bank securities.

In terms of loan utilization from abroad, banks, the General Government, and other sectors realized net utilization of 815 million dollars, 2 million dollars, and 1.3 billion dollars, respectively, this month.

Under other investments, deposits of foreign banks in domestic banks recorded a total net increase of 2.5 billion dollars, with a net increase of 2.3 billion dollars in Turkish lira and 156 million dollars in foreign currency, respectively. There was a net increase of 13.5 billion dollars in official reserves this month.