Effect of energy import on balance of payments: The case of Turkey

Production is the most important indicator of economic development. One of the inputs of production is energy. Therefore energy is important for national economies. Especially the increase in economic growth rate in developing countries leads to increase in energy demand. The word meets most of its energy needs from fossil sources such as oil and natural gas. However these energy sources have an irregular distribution on the earth. Countries which are insufficient in terms of energy resources such as Turkey, meett hemost of their energy needs by importing them. High energy imports of countries depended on foreign energy current acco unt deficit. Inthestudy, there lationship between Turkey's energy imports and the balance of payments was examined by time series analysis methods. In the analyses, quarterly data for the period 2007Q1-2021Q3 of the current account balance dependent variable, oil and natural gas import amount, industrial production index, GDP and real effective exchange rate independent variables were used. As a result of there search, it was determined that the amount of natural gas and oil imports and the variables of the industrial production index negatively affected the current account balance. It is thought that reducing Turkey's energy imports, improving and developing renewable energy sources andex isting energy production facilities and distribution channels will reducet he current account deficit. Keywords: Energy Imports, Balance of Payments, Time Series Analysis