Highest source of money inflow of uncertain origin in history

ANKARA – The Central Bank of the Republic of Turkey (CBRT) announced that the current account deficit in the first 7 months of the year was 36.6 billion dollars. The 7-month money inflow of uncertain origin (net error and omissions item) was 24.34 billion dollars.

IYI Party Development Policies President Prof. Dr. Ümit Özlale evaluated the figures announced by the Central Bank. Stating that the resulting situation may be due to measurement problems such as time inconsistency in the data flow, Özlale said, “However, it is not possible to accept a measurement problem as much as 66.4 percent of the current account deficit. Moreover, there are only two periods in which the net error and omissions item is positive for 7 months in a row. The first is from September 2008 to March 2009. In this period, there are 12.9 billion USD net errors and omissions. The second is the first 7 months of 2022, and the net errors and omissions in these last 7 months are almost twice that of 2008-2009. As such, it is difficult to accept this entire amount as a net error or omission. It would be more accurate to say that an important part of it is neither an error nor an omission,” he said.

Another data that also concerns the balance of payments and was announced two days ago is foreign trade indices. Reminding that it was announced in July that exports increased by 6.8 percent and imports increased by 11.3 percent compared to the previous month, Özlale said, “The unit price part is a tragedy. The unit price of our exports increased by 6.2 percent and the unit price of our imports increased by 27 percent. In other words, we have seen again that the new economy model, which builds export-based growth on cheap labor, does not work very well” and made the following comment:

“The issue is not only price, but we are connected to the world in terms of quantity in a way that disrupts the balance of payments. Considering that the possibility of a decrease in our exports to Europe due to the energy crisis is quite high and that the seasonal effect on tourism revenues is over, we can clearly say that things will not improve on the current account deficit front. When you also consider that the investment attractiveness of our country hangs by a thread, ‘how long can they use net errors and omissions to finance this deficit?’ question comes to mind. If we can’t find financing even though the source is unknown, we will have to burn reserves, but you are at least as uncomfortable as we are to tell or hear that there are not many usable reserves in our country.”


According to Özlale from the IYI Party, the industrial production data released point to the growth in the real sector. Stating that there was a 6.2 percent decrease in industrial production on a monthly basis and that another slowdown indicator appeared in retail sales, Özlale said, “These signs of slowdown must have disturbed the government and especially the President, because we know that they are preparing for a new big loan package,” and continued as follows:

“There is no need for academic discussions about whether this will have an inflationary effect, because the government doesn’t really care about inflation. For example, yesterday, Mr. President announced the new housing project, but two days ago, the construction cost index data said that the cost of building construction increased by 7.1 percent in July to 110.6 percent annually. While the production costs continue to increase uncontrollably, the possibility of the project that will provide the opportunity to buy housing for the minimum wage is frankly thought-provoking.”


Stating that the only positive indicator that the government can present as a ‘success indicator’ in the last two days is the decrease in the unemployment rate announced by TÜİK, Özlale said, “Although employment decreased by 148 thousand people in a month, according to the data of TURKSTAT, there was a decrease in the unemployment rate due to the decrease in the labor force by 262 thousand people. However, there was an increase in all broad unemployment rates,” he said.

“The real sector cannot sustain production any longer… The demand for foreign currency in the economy is increasing, but the foreign exchange inflows into the country are through unexplained channels and it is not clear how sustainable it is… As the price increases continue unabated, the citizens lose their hope of finding a job… In such an environment, the President offers cheap prices to the citizens in their event by spending millions of TL. tells about their projects that will offer housing opportunities.” (WALL)