The relationship between current account deficit, economic growth and oil prices in emerging market economies

While many developing countries realize their economic growth, they also face the current account deficit problem. When the balance of payments of this countries are examined, energy imports are one of the main causes of the current account deficit problem. The aim of this study is to investigate the relationship between current account defcit, economic growth and oil prices. In the study, only 6 countries (Argentina, Indonesia, India, Mexico, Turkey and South Africa), which are members of the G-20 out of the 23 countries included in the definition of emerging market economies are examined. The relationship between current account deficit, economic growth and oil prices has been analyzed using panel data method for the period 1982-2019. In the model, the variables of gross domestic product, current account balance and Brent oil prices, which are the determinants of economic growth, were used. According to the Dumitrescu and Hurlin Panel Causality Test results, a one-way causality relationship was found from economic growth to current account deficit and oil prices, from oil prices to current account deficit. As a result of the panel regression analysis, it was concluded that oil prices and economic growth positively affect the current account deficit. While no statistically significant relationship was found between current account deficit and economic growth in terms of selected countries, a statistically significant relationship was found between current account deficit and oil prices.