Examining the relationships between budget deficit and macroeconomic indicators

This study aims to examine the interaction between budget deficits and macroeconomic factors, specifically in Turkey. In the study, monthly data of budget deficits and some macroeconomic factors for the period 2006-2023 were used. These data were subjected to VAR analysis to test the hypotheses created in line with the purpose of the study. According to the findings obtained from the analysis, it has been concluded that budget deficits affect inflation, interest rates and dollar exchange rates, and unemployment rates affect budget deficits, and that there is also a mutual interaction between the industrial production index and budget deficits in the short term. According to the statistically significant results of the analyzes examining long-term relationships, budget deficits affect all variables except the industrial production index positively or negatively, and are also affected by itself, employment rates, industrial production index, unemployment rates and the dollar exchange rate. It is thought that the findings obtained in the study provide useful information to relevant parties.