The effect of foreign trade deficit on growth, inflation, exchange rate and employment in Turkish economy ( 2006-2016)

Together with globalisation, countries are doing foreign trade in order to improve their economy and sustain their political existence. There are two legs of foreign trade. First exporting their surplus products and second importing raw materials or intermediate items to continue their production. The fact that importing is higher than exporting creates foreign trade deficit. Policies in foreign trade are important issues in determining countries direction. In recent years, the fact that importing has been higher than exporting cause some effects to the economy. Especially developing, inflation, unemployment and exchange rates which dominate economy are critically important issues. It is not possible to ignore foreign trade deficit's effects on those issues. In this thesis, foreign trade data between the years 2006-2016 has been used correlating foreign trade deficit's effects on development, inflation, employment and exchange rates. Besides, these reasons for these effects, solutions and aims has been researched. Keywords: Foreign Trade, Foreign Trade Deficit, Turkish Statistics Institution, Current Deficit's Determinants.