Determinants of current account deficit in Turkiye: An application for 1992-2017

The current account deficit that is shown as the main indicator of the fragility of the Turkish economy is an issue long debated for years. Turkey, which is among the developing countries, needs strong growth figures in order to create employment. In the 1980s, Turkey has adopted an export-led growth hypothesis. However, imported products are needed at the production stage of exported goods. Therefore, Turkey can not prevent the increase of imports while increasing exports in order to be able to grow and therefore it cannot improve the foreign trade deficit and the current account deficit. The aim of this study is to identify the determinants of current account deficit which is considered to be vulnerable point in Turkey's economy and the crisis signals as shown in several studies in the literature. Recognizing determinants of the current account deficit which is the main priority issue of Turkey's economy will help economic management to guide the formulation of policies to cope with the current account deficit in the future perroch. In other words, while the economic policies for sustainable high growth rates targets are being developed, it will be possible to make use of the determinants of current account deficit to ensure that the current account deficit problem is achieved at acceptable levels