In this way, the current account deficit increased from the revised $5.422 billion in April and the $5.8 billion short position in May 2022. In the 5-month period, the current account deficit was 37,696 billion dollars (January-May 2022: 26.14 billion dollars). Thus, the twelve-month current account deficit rose from $57.9 billion to $60 billion in May 2023.

In the balance of payments balance sheet, the goods trade balance had the most significant impact by giving a deficit of 10.48 billion dollars in May. The fact that the industry operated with a weak production volume in April and May, and therefore the recovery in manufacturing was not at the desired level, also put pressure on exports. On the other hand, the fact that the recovery in the Euro Area is quite fragile on the foreign demand side and that such economies tend to slow down is another weakness in this area. The services balance, on the other hand, gave a surplus of 3,858 billion dollars. The increase in tourism revenues seems to have contributed positively to the current account deficit in May as well.

On the financing side, net FDI inflow was $89 million in May. Net portfolio outflow was $1.41 billion. While net sales of stocks were 630 million dollars, net sales of debt instruments were 90 million dollars. While the financial account gave a surplus of 1.224 billion dollars, the capital account gave a deficit of 16 million dollars. While net errors and omissions were $ 7.41 billion, official reserves decreased by $ 16.6 billion.

Turkey's C/A account, million USD, 12 months… Source: CBRT, TURKSTAT, Dinamik Yatırım

Data from the Ministry of Commerce revealed a foreign deficit of $5.4 billion in June. In this period, imports decreased by 16.6% on an annual basis in June and amounted to 26.3 billion dollars. Despite the 10.5% decrease in exports on an annual basis, the more significant decrease in imports also made the foreign trade deficit to be lower in June. Considering the 6-month period between January and June, the total 6-month foreign trade deficit was 61.4 billion dollars, with imports of 184.8 billion dollars and exports of 123.4 billion dollars. This deficit was at the level of $51.6 billion in the January-June 2022 period. Therefore, the increase in the foreign trade deficit last year indicates that the current account deficit may go up a little.

Service revenues, on the other hand, will increase significantly as of the tourism season. The effect of tax increases and the contraction in demand may reduce the import part. The continuation of the upward correction in the exchange rate may support exports to some extent. We estimate that there may be a decrease in the current account deficit in June due to the June foreign trade deficit of 5.4 billion dollars and the net tourism revenues, which we expect to be 3.5 billion dollars. We still think that a higher annual current account deficit may be realized in 2023 compared to 2022.

Kaynak: Dinamik Yatırım-Enver Erkan