Turkey expects wider current account deficit in 2026 due to high energy costs from Iran war

Turkey's current account deficit widened to $9.6 billion in March, the highest monthly gap in three years, driven by a higher trade gap amid soaring energy prices linked to the Iran war, Treasury and Finance Minister Mehmet Şimşek said on Wednesday, May 13, 2026.

Excluding gold and energy, the March deficit stood at $3.9 billion, the central bank reported. The goods deficit in March was $9.5 billion, while services posted a surplus of $2.6 billion. On an annualized basis, the current account shortfall totaled $39.7 billion, or about 2.6% of GDP. The annualized goods deficit was $77.8 billion, services surplus was $63 billion, primary income net deficit was $23.8 billion, and secondary income net deficit was $1.1 billion.

"This year, the current account deficit will increase due to the high course of energy and non-energy commodity prices," Şimşek wrote on social media platform X. "Thanks to the gains achieved through our program and strengthened macroeconomic foundations, we assess that this increase will remain at manageable levels and be temporary."

Şimşek said the annualized current account gap was expected to decline significantly in April, supported by an improvement in the foreign trade balance. However, he warned of a temporary deterioration in May due to an extended public holiday period that is likely to disrupt economic activity. "At the same time, we observe that the war's impact on tourism revenues has remained limited," Şimşek said.

Direct foreign investment inflows totaled $1 billion in March, bringing annualized foreign direct investment to $12.6 billion. Şimşek said Turkey's sovereign risk premium (CDS) was approaching pre-war levels, while debt rollover ratios remained strong. He added that a new investment incentive package currently under discussion in Parliament was expected to strengthen Turkey's financing structure and support long-term capital inflows.