Turkey’s current account deficit widened to $32.4 billion in the first half of the year, Central Bank data showed Thursday, as financing the gap is becoming harder and no respite appears in sight for the battered Turkish lira.

The current account registered a deficit of nearly $3.5 billion in June, bringing the cumulative gap to $32.4 billion in the first six months of the year, according to the data.

The widening gap owes to Turkey’s worsening trade imbalance as a result of a global surge in energy and commodity prices, coupled with the continued slump of the lira. Facing crucial elections in June 2023, President Recep Tayyip Erdogan has bet on a strategy promoting growth at the expense of inflation hitting near 80%. And growth means ample imports for Turkey’s economy, which relies heavily on foreign inputs, chief among them energy.

The country’s imports were worth nearly $30 billion in June, a 40% increase from the same month last year. Its monthly energy import bills have reached $7 billion to $8 billion with the surge of global prices. As of June, the 12-month net energy imports were worth some $70.6 billion.

The shortfall in trade has grown despite a rebound in tourism revenues this year. And while the number of foreign tourists increased, their average spending per capita was relatively low — less than $750.

Pushing up imports was also a stockpiling trend among entrepreneurs worried about the country’s economic prospects. The cost of imported inputs has kept increasing amid the slump of the lira. Doubtful of the government’s ability to stabilize the currency, many economic actors have come to stock up on imported raw materials, semi-products, machinery and equipment to avoid even higher costs down the road.

While energy prices have begun to relatively ease and the global economic slowdown is pushing commodity prices down, Turkey’s imports appear unlikely to slow in the remainder of the year.

And financing the current account deficit is becoming harder as the country struggles to attract foreign capital.


Written by Mustafa Sönmez