Goldman Flags Turkey’s Reserve Decline and External Funding Gap

Goldman Sachs warned that a $30 billion decline in Türkiye’s central bank reserves over the past 12 months points to a shortfall in financing the current-account deficit. The bank also forecast the deficit would reach about $50 billion this year, or 2.9% of GDP.

Türkiye’s current-account balance posted a $4.053 billion surplus in August, according to data released by the Central Bank of the Republic of Türkiye. The net errors and omissions item recorded an inflow of $4.52 billion, up from $515 million the previous month.

Goldman Sachs said the August current-account surplus, alongside the errors and omissions inflow, lifted reserves on a balance-of-payments basis by about $7 billion. Net portfolio outflows of $1.4 billion partly offset those inflows.

Separately, the central bank’s total reserves dropped by $3 billion 816 million in the week to October 2, to $167 billion 388 million. Reserves had fallen for six straight weeks, with the cumulative decline reaching $21.1 billion.

The bank said lower imports of core goods and a seasonal rise in tourism income supported the improvement in the current account. It warned that a year-on-year fall in tourist numbers could weigh on the balance, particularly from 2027. Goldman Sachs added that the projected deficit’s size matters for Türkiye’s external financing needs, despite its share of GDP being below historical averages.