May data show Turkey’s current-account deficit rose 32% year-on-year, straining FX reserves and fueling depreciation risks for the lira.
Turkey’s current-account deficit expanded by 32% year-on-year to USD 1.5bn in May, pushing the cumulative January-May gap to USD 30.7bn. The 12-month rolling deficit reached USD 37.3bn, or 2.3% of GDP, signaling persistent structural imbalances driven by savings-investment gaps.
Portfolio inflows remained weak, with May recording a USD 3.1bn net outflow after a brief USD 4.1bn inflow in April. Non-residents sold USD 2.8bn in equities and reduced exposure to domestic government debt, reflecting subdued investor sentiment.
Net FX reserves, excluding swaps, are estimated at around USD 30bn following heavy interventions, leaving limited buffers to defend the lira amid ongoing depreciation pressure.