ANKARA: Turkiye narrowed its current-account deficit last year after a sharp policy reversal started to cool off domestic demand in the almost US$1 trillion economy by aggressively raising interest rates.
Balance-of-payments data published yesterday showed the gap in the current account, the broadest measure of trade and investment, shrank to US$45.2bil for the full year, from US$49.1bil in 2022.
Though improving since May with four months of surpluses or near-zero deficits, the current account deteriorated at the end of 2023 largely as a result of a higher energy bill.
The shortfall in December was US$2.1bil, according to the figures published by the central bank, less than forecast by economists surveyed by Bloomberg.
The deep deficit reflects the challenges still facing Turkyish policymakers in steering an economy long hobbled by trade imbalances.
The central bank has more than quintupled its key rate to 45% and said in January it’s ending an eight-month long cycle started after presidential elections in May.
Turkiye’s U-turn looks intact despite this month’s sudden departure of Hafize Gaye Erkan as central bank governor. — Bloomberg
