• Current account gap drops to 2.4% of GDP, lowest level since Q1 2021

ISTANBUL

The US current account deficit narrowed 20.2% quarter-on-quarter to $190.7 billion in the fourth quarter of 2025, marking its lowest level since the first quarter of 2021, according to Bureau of Economic Analysis data released on Wednesday.

Market expectations had pointed to a deficit of $211 billion for the last quarter of 2025.

The US current account deficit for the third quarter of 2025 was revised up to $239.1 billion from the previously reported $226.4 billion.

The deficit as a share of gross domestic product was calculated at 2.4% in the fourth quarter, down from 3.1% in the third quarter.

"The $48.4 billion narrowing of the current-account deficit in the fourth quarter reflected a shift in the balance on primary income from a deficit in the third quarter to a surplus in the fourth quarter and a reduced deficit on goods," the bureau said in a statement.

Exports of goods and services and income receipts from foreign residents rose by $32.4 billion to $1.33 trillion in the fourth quarter of 2025, driven by increases in goods exports and primary income receipts.

Imports of goods and services and income payments to foreign residents fell by $16 billion to $1.52 trillion in the same period, mainly due to declines in goods imports and primary income payments.

Capital transfer receipts edged down $80 million to $101 million in the fourth quarter, while capital transfer payments rose $1.8 billion to $3 billion.

Net financial-account transactions stood at negative $135.9 billion in the fourth quarter, reflecting net US borrowing from foreign residents. During the period, US residents’ foreign financial assets climbed $405 billion, while liabilities to foreign residents rose $532 billion.

The US net international investment position was negative $27.54 trillion at the end of the fourth quarter of 2025, compared with a revised negative $27.55 trillion at the end of the third quarter. Total US assets stood at $42.96 trillion and liabilities at $70.49 trillion.