By Joshua Kirby
Turkey booked a further deficit in its current account in December as income from the services sector continued to weaken.
The country's balance of payments, which measures the difference between inflows of money to the country and out of it, recorded a deficit of $2.09 billion in the final month of last year, compared with $2.77 billion in November, central-bank figures showed Tuesday. In December of 2022, the deficit stood at $5.91 billion.
The narrower deficit in December came amid a sharp reduction in the country's primary-income deficit, which had spiked a month earlier to more than $1.3 billion. The surplus in services on the other hand continued to lessen.
Earlier in the year, Turkey booked rare surpluses in its current account as a summer tourism boom brought a wave of dollars into the Mediterranean nation. But a steady weakening of the Turkish lira has fuelled rampant domestic inflation and sent import prices soaring, weighing on the goods-trade balance. For the year as a whole, the country's current account registered a deficit of $45.15 billion, down from $49.09 billion in 2022, with the goods deficit standing largely unchanged at $86.56 billion.
The central bank last year embarked on a course of interest-rate cuts in a bid to tame price rises, with some success. The bank now expects inflation to ease to 36% by the end of the year from around 65% currently, and has signaled it will leave its key rate elevated for as long as it takes to bring price rises down to manageable levels.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
02-13-24 0237ET
