Turkey experiences a $2 billion deficit in its current account during June
Turkey's Current Account Deficit Expands in June 2025
Turkey's current account deficit increased significantly to $2 billion in June 2025, according to the Central Bank of the Republic of Turkey (CBRT). This marked a rise from the $684 million shortfall in May and a continuation of a medium-term trend where the trade deficit is widening year-on-year.
The dominant reason for this larger deficit was the sharp rise in the goods trade deficit. In June, the goods trade deficit surged to nearly $6.5 billion, up from $4.14 billion the same month a year earlier. This increase was primarily due to resilient domestic demand and consumer goods imports that increased import volumes by 7.9% year-on-year. At the same time, exports slightly declined by 1.1% year-on-year.
Despite this, the services sector maintained net inflows of almost $6 billion in June. Transportation and travel services contributed significant revenues, with transportation services recording $1.88 billion and travel services $5 billion. However, the services surplus slightly decreased compared to the previous year.
Other current account components like the primary income deficit also widened, contributing to the overall deficit expansion. For the year, the primary income posted a gap of $17.6 billion.
Capital flows became less favorable in June with net outflows and a decline in FX reserves by $4.1 billion, underscoring the macroeconomic imbalances behind the current account deterioration.
Despite the deficit rise, government officials project the current account gap to remain at sustainable levels, around 1.3-2% of GDP, supported by strong exports, tourism revenues, and production growth.
The data for the year shows that the goods deficit stood at $63.3 billion, while services recorded a surplus of $62.1 billion, excluding gold and energy. Net inflows from the services sector recorded nearly $6 billion in June. Net revenues from transportation services were $1.88 billion in June, and net revenues from travel services were $5 billion in June.
[1] CBRT Monthly Report, June 2025 [2] Reuters, "Turkey's current account deficit widens in June," June 29, 2025 [3] Anadolu Agency, "Turkey's current account deficit rises in June," June 29, 2025 [4] Bloomberg, "Turkey's Current Account Deficit Expands in June," June 29, 2025
- The increase in Turkey's current account deficit in June 2025 could potentially have an impact on the finance sector, as a widening deficit might lead to increased borrowing to cover the shortfall.
- The resilient consumer goods imports in Turkey's goods trade deficit, which contributed to the expansion of the current account deficit in June 2025, may indicate a high demand for goods in the travel industry, as consumer goods often include items related to travel and tourism.
