The current account deficit narrowed sharply to just 0.8 per cent of GDP—down from 3.5 per cent in 2023. However, the IMF noted that external vulnerabilities persist, particularly after the March 2025 reserve loss episode and ongoing policy shortfalls.
Gross international reserves rose to $155 billion in 2024, but remain critically below the IMF’s adequacy threshold, with core reserves still at risk of dipping into negative territory. The net international investment position (NIIP) improved to –22.3 per cent of GDP, aided by valuation effects and reduced short-term liabilities. Nevertheless, external debt remains high at 39 per cent of GDP, nearly 44 per cent of which is short-term.
The IMF urged Turkiye to tighten monetary and fiscal policies, phase out credit distortions, and allow for more credible macroeconomic adjustments to ensure durable external sustainability. Notably, Turkiye’s real exchange rate appreciated sharply in 2024, and the lira is assessed to be overvalued by around 5.2 per cent.
The IMF stressed that credible policy normalisation remains key to rebuilding investor confidence and sustaining capital inflows—especially after the March 2025 volatility.
ALCHEMPro News Desk (HU)
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