Turkey: current account and GDP

The current account deficit (CAD) of the Republic of Turkey has increased significantly in recent times, due in part to rising imports and energy costs.

In 2022, Turkey’s Gross Domestic Product (GDP) increased 5.6% from the previous year, according to Turkish government data.

Turkey’s CAD for 2022 and 2021 was approximately $48.77 billion (5.4% of GDP) and $7.2 billion (0.9% of GDP), respectively.

While for 2019 Turkey recorded a current account surplus of about $10.8 billion (1.4% of GDP), for 2018 and 2020 its CAD was $20.2 billion (2.5% of GDP) and $31.9 billion (4.4% of GDP), respectively.

Current account

As a description of a risk: financing the CAD could become difficult in case of a global liquidity crisis and/or a decline in foreign investors’ interest in Turkey.

An expansion of the CAD may lead to an increase in Turkey’s debt levels, a decrease in the reserves of the Central Bank of the Republic of Turkey (CBRT) to finance the CAD and/or depreciation of the Turkish lira.

Also an increase in the CAD may affect the ability of the Turkish economy to generate sufficient foreign currency assets to cover external debt obligations.

Any of these developments could have a material adverse effect on this nation’s financial and economic situation.

GDP and debt

The country’s nominal GDP was approximately 7,249 trillion Turkish lira in 2021.

On August 18, 2022, Japan Credit Rating maintained Türkiye’s unsolicited long-term issuer and senior unsecured debt ratings at “BB,” but revised the outlook to “negative” from “stable.”

Then, on September 30, 2022, Standard & Poor’s downgraded its unsolicited foreign and local currency long-term sovereign credit ratings on Türkiye to “B” from “B+”.

At the same time, Standard & Poor’s affirmed the unsolicited short-term foreign and local currency ratings at “B”. The outlook was revised from negative to stable.

On July 8, 2022, Fitch downgraded Turkey’s credit rating from “B+” to “B” and maintained its outlook at “negative”.

Then, on November 18, 2022, Fitch affirmed the credit rating at “B” and maintained its outlook at “negative”.

Finally, on August 12, 2022, Moody’s downgraded Turkey’s long-term foreign and local currency issuer and senior unsecured foreign currency ratings from B2 to B3 and changed the outlook from “negative” to “stable”.


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