If the cyclical effects ease and particularly, if global commodity prices converge to their long-term trends, the deficit observed in the headline current account balance may decrease significantly and even post a surplus.
The project-based incentives program, designed to promote investments in upper-medium and advanced technology, is intended to reduce the current account deficit in the medium to long term.
During periods of monetary tightening, rebalancing of domestic demand is expected to positively affect the foreign trade balance and the current account balance. The latest monetary tightening cycle, which began in June 2023, affects various macroeconomic indicators besides inflation, including foreign trade and the current account balance. In this blog post, we provide a descriptive analysis of the effects of the recent monetary tightening on Türkiye’s foreign trade and current account balance.
