The Current Account (CA) deficit narrowed markedly to 3% of GDP in 2Q25, bringing the 1H25 CA deficit to 5.3% of GDP, down from 7.0% in 1H24,- according to the Weekly Market Watch, published by Galt&Taggart.
As of the report, this improvement was mainly driven by stronger service inflows: the services surplus rose by 17.1% y/y to USD 1.9bn, supported by robust growth in ICT exports (+43.8% y/y to USD 560mn), followed by moderate gains in tourism (+3.8% y/y to USD 2.0bn) and transport (+4.6% y/y to USD 827mn).
On the other hand, the merchandise trade deficit - the largest source of external imbalance - widened slightly by 0.5% y/y to USD 3.4bn, as exports increased by 13.7% y/y and imports were up by 7.5% y/y). Notably, net FDI remained the dominant source of financing, covering 65.3% of the CA deficit in 1H25.
"We forecast CA deficit at 5.0% of GDP in 2025, down from 5.4% posted in 2024", - G&T writes.
