Locals and foreign tourists shop at the Grand Bazaar in Istanbul, Turkey, October 21, 2021.
Locals and foreign tourists shop at the Grand Bazaar in Istanbul, Turkey, October 21, 2021. Reuters / DILARA SENKAYA

Turkey's trade deficit widened 186% year-on-year in the first two months of the year due to a surging energy bill, data showed on Wednesday, as soaring commodities prices prompted economists to raise their current account deficit forecasts.

The trade deficit stood at $8.1 billion in February. Exports climbed 25.4% year-on-year to $20 billion and imports jumped 45.6% to $28.1 billion, mainly due to swelling energy imports, trade ministry data showed.

Trade Minister Mehmet Mus said in a televised speech that severe winter conditions coupled with the increase in energy prices caused the spike in imports.

Russia's invasion of Ukraine has pushed oil prices to their highest since 2014 at more than $110 a barrel, raising risks for energy importer Turkey. Prices of grains, which Turkey imports mainly from Ukraine and Russia, have also surged.

The conflict could also slash Turkey's tourism revenues, as Ankara tries to implement President Tayyip Erdogan's new economic programme that prioritises production and exports with the aim of achieving a current account surplus.

Turkey's lira had traded broadly stable since the beginning of this year, but blew through 14 against the dollar last week due to rising tensions between Moscow and Kyiv.

It weakened 1.5% on Wednesday, before paring its losses.

Goldman Sachs said in a recent note that Turkey's reliance on tourism revenues from fighting parties as well as rising commodity prices is likely to lead to higher inflation, a wider current account deficit and lower economic growth.

It revised a current account deficit forecast for 2022 to 2.5% of GDP from 1.5% previously, adding that the conflict can renew pressure on the lira.

QNB Finansbank revised its 2022 current account deficit forecast up to $25 billion from a previous $10 billion. The government expects the current account to reverse course and record a surplus.

JP Morgan also doubled its current account deficit forecast to 2.2% for this year from 1.1% of GDP.

Turkey imported most from Russia, China and Germany last month. The top three destinations for Turkish exports were Germany, the United States and the United Kingdom, trade ministry data show.