The impact of volatility in global oil prices on economic growth: The case of Turkey (1998-2022)

This thesis examines the impact of global oil price volatility on Turkey's economic growth. Conducted using data from 1998Q1 to 2022Q4, this study analyzes the issue using ARCH-GARCH models. Fluctuations in oil prices create economic uncertainties, particularly in oil-importing countries, and these uncertainties can negatively affect economic growth. In the first section of the research, oil, its importance, and the general characteristics of the oil sector are addressed. The second section details economic growth, its influencing factors, and theories. In the third section, the relationship between oil price volatility and economic growth is discussed. In the fourth section, the impact of oil price volatility on economic growth is empirically analyzed using Turkey's economic data from 1998Q1 to 2022Q4. The research results indicate that oil prices have a statistically significant and negative impact on economic growth in Turkey. A 1 % increase in oil price volatility results in an approximate 0.10% decrease in economic growth. The study also found that oil prices have a statistically significant and negative impact on industrial production in Turkey. A 1 % increase in oil price volatility leads to an approximate 0.27 % decrease in industrial production. These findings determine that Turkey's economic growth performance is sensitive to oil price volatility. These results should be considered in shaping economic policies.