The effect of oil and natural gas prices on the current account balance: An application on vulnerable countries

One of the most important economic indicators in developing countries is the current account. When we examine the balance of payments in these countries, the main reason for the current account deficit problem is energy imports. The aim of this study is to investigate the relationship between oil and natural gas prices and current account balance. Brazil, India, Indonesia, South Africa and Turkey, which are called fragile countries, were included in the research. The effect of oil and natural gas prices on the current account balance between 2002 and 2020 was investigated by panel data analysis method. In the model included in the analysis; Cross-sectional dependencies of current account balance (CAB), exchange rate (EXC), real crude oil prices (RAP), real gas prices (ROP) variables were examined and as a result, it was determined that there was a cross-section dependency. According to the results of Pedroni (1999) cointegration tests; It has been determined that there is a cointegration relationship between the current account balance and gas prices, and between the current account balance and oil prices. In order to make long and short term estimations of the model, by estimating with the Panel ARDL model; Analyzed with MG (Mean Group) and PMG (Pooled Average Group) estimators. Accordingly, it was concluded that the increase in oil and natural gas prices affected the current account balance negatively by increasing the current account deficit.