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ISTANBUL: Turkey’s current account is expected to record a deficit of $5.37 billion in March and end the year with a deficit of $38.35 billion, a Reuters poll showed on Wednesday, as soaring energy prices widen the shortfall.

Wiping out Turkey’s chronic current account deficit, at $14.9 billion in 2021, has been one of the main goals under President Tayyip Erdogan’s new economic programme that also prioritises growth, exports and employment with low rates.

But Russia’s invasion of Ukraine has raised the price of oil and natural gas, making it more difficult for Turkey to meet the shortfall, given that tourism revenues could also drop this year due to fewer arrivals from the two countries - both usually major sources of tourists.

The trade deficit, a major component of the current account balance, surged 75% year-on-year in March to $8.17 billion, official data shows, mainly due to energy imports.

The median estimate of 13 economists in the Reuters poll for the current account deficit in March was $5.371 billion, with forecasts ranging between $4.27 billion and $7 billion.

The deficit was seen at $38.35 billion for 2022 as a whole, according to the median estimate of 12 economists, with the range of forecasts between $32.50 billion and $60 billion.

Economists have been revising up their forecasts for the 2022 deficit due to energy prices.

The median forecast was $29 billion two months ago.

Turkish lira extends slide; CDS back at 2008 levels

The deficit stood at $7.1 billion in January, the highest since Dec. 2017, and was $5.15 billion in February.

A currency crisis in 2018 led to a recession and a sharp contraction in imports, helping Turkey record a rare current account surplus in 2019.

Under Erdogan’s economic plan, the central bank cut its policy rate by 500 basis points since September, which led to a currency crisis that saw the lira lose 44% against the dollar last year.

Compounded by soaring commodity prices, inflation surged to 70% in April.

Turkey’s central bank will announce March current account data at 0700 GMT on May 16.

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