Reserve warning for Türkiye from Goldman Sachs: $30 billion decrease in 12 months

US-based investment bank Goldman Sachs published its analysis of Turkey's August current account balance data.

According to the data announced by the Central Bank of the Republic of Turkey (CBRT), the current account account gave a surplus of 4 billion 53 million dollars in August.

Thus, the highest monthly surplus of the last year was recorded in the current account balance.

Net errors and omissions item increased from 515 million dollars in July to 4 billion 520 million dollars in August.

RESERVES HAVE BEEN DECREASED FOR SIX WEEKS

CBRT's total reserves decreased by 3 billion 816 million dollars in the week of October 2 compared to the previous week, falling to 167 billion 388 million dollars.

Thus, the total decrease in reserves in six weeks reached 21.1 billion dollars.

Goldman Sachs, on the other hand, drew attention to a broader period in its analysis and stated that there was a decrease of approximately 30 billion dollars in the CBRT reserves in the last 12 months.

The bank evaluated that this decrease points to inadequacies in financing the current account deficit.

7 BILLION DOLLARS SUPPORT FOR RESERVES IN AUGUST

In the report of Goldman Sachs, it was stated that there was an outflow of 1.4 billion dollars in the financial account in August due to the effect of net portfolio outflows.

On the other hand, an inflow of 4.5 billion dollars was recorded in the net errors and omissions item.

The report stated that these developments, together with the current account surplus of 4.1 billion dollars, contributed approximately 7 billion dollars to the reserves on a balance of payments basis in August.

EFFECT OF IMPORTS AND TOURISM ON CURRENT ACCOUNT SURPLUS

Goldman Sachs stated that a significant part of the improvement in the current account balance was due to the decrease in core goods imports and the seasonal increase in tourism revenues.

The bank evaluated that the annual decline in the number of tourists could put pressure on the current account balance, especially starting from 2027.

END OF YEAR CURRENT DEFICIT ESTIMATED IS 50 BILLION DOLLARS

Goldman Sachs expects Turkey's current account deficit to correspond to 2.9 percent of gross domestic product at the end of the year.

According to the bank's forecast, the current account deficit will reach approximately 50 billion dollars.

The report emphasized that although the ratio of current account deficit to national income remains below historical averages, the total amount remains important in terms of Turkey's external financing needs.