New record in current account deficit: Central Bank data raises concerns

The Central Bank of the Republic of Turkey (TCMB) has released its balance of payments statistics for March 2025. According to the released data, the current account deficit reached its highest monthly level of the recent period at 9.67 billion dollars. The estimate by economists for the same period was around 9.6 billion dollars.

With this development, the annualized current account deficit figure has reached 39.7 billion dollars. This rise, which stands out as the highest value recorded since January 2023, has once again highlighted the fragility of the economic balance.

When gold and energy are excluded, the current account deficit in March was calculated at 3.9 billion dollars.

NOTABLE INCREASE IN ANNUAL FIGURES

In March, the foreign trade deficit defined by the balance of payments was recorded at 77.8 billion dollars. During the same period, a surplus of 63.1 billion dollars was formed in the services balance. While a deficit of 23.8 billion dollars occurred in the primary income balance, a deficit of 1.1 billion dollars was observed in the secondary income balance.

SERVICE REVENUES CONTINUE TO PROVIDE SUPPORT

Net inflows in the services balance were particularly notable. In March, there was a net inflow of 2 billion 592 million dollars in this area. Revenues of 1 billion 627 million dollars were generated in transport services, and 2 billion 246 million dollars in the travel item.

SHARP MOVEMENTS IN PORTFOLIO AND DIRECT INVESTMENTS

Looking at the sub-items of the financial account, a net outflow of 212 million dollars originating from direct investments was detected in March. While direct investments by non-residents in Turkey increased, there was also a significant rise in investments by residents abroad. In real estate purchases, Turkish investors spent 187 million dollars abroad, while foreigners made purchases worth 243 million dollars in Turkey.

In portfolio investments, a dramatic outflow was observed in March. While there was a total portfolio outflow of 14 billion 800 million dollars, a net sale of 1 billion 79 million dollars occurred in the stock market, and 6 billion 399 million dollars in government domestic debt securities.

DECLINE IN RESERVES DRAWS ATTENTION

In the other investments item, deposits of foreign banks in Turkey decreased by 6 billion 915 million dollars. Furthermore, a net decrease of 43 billion 420 million dollars was recorded in official reserves in March. This situation has brought about question marks regarding the sustainability of Central Bank reserves.

Economic experts point out that the increasing current account deficit and the decline in reserves should be closely monitored. It is emphasized that economic policies in the coming period may be shaped according to this data.