Is the current deficit gas with natural gas?

The current account deficit in July was announced as 4 billion dollars, above the expectations. The 7-month total deficit increased from $13.7 billion last year to $36.7 billion this year.

The biggest factor affecting the current account deficit in the 7-month period of the year is the foreign trade deficit of 62.2 billion dollars. The surplus of other services revenues partially reduces this gap.

In the Medium Term Program announced in the first week of September, the current account deficit is expected to be 47.3 billion dollars this year. The ratio of this to the annual 2022 GDP forecast of 808 billion dollars was taken as 5.9 percent.

➔It seems that the current account deficit forecast will deviate significantly.

Although the economy is entering the last quarter of the year with a slowdown, it can be said how the current account deficit will continue to increase.

➔ Moreover, there is an extra extension of the tourism season this year.

➔We are also waiting for tourists escaping Europe’s expensive natural gas during the winter months. In short, tourism revenues may come out better than forecasts.


➔According to the foreign trade quantity indices announced yesterday and the graphs attached to it, there is no real or quantity increase in imports. There is a horizontal course. Exports are increasing in quantity, but the last month has turned its direction down.

➔Foreign trade figures on the basis of amount that the public knows and is interested in. On the basis of amount, the 7-month import increase is 40 percent, the export increase is 19 percent, and the foreign trade deficit is 62.2 billion dollars.

➔The terms of trade have turned against Turkey. The price of what we import has risen, what we export has fallen.

➔Since loans are restricted and the economy is slowing down, the decrease in imports may be very limited. There has been no real increase so far.

After all, the industrialist who finds the financing wants to replace his depleted stocks.

➔Because the exchange rate is in a very stable course this year with the effect of currency protected deposits. According to the real effective exchange rate calculated by the Central Bank with producer prices, which is also relevant for the calculation of imports with producer prices, TL has already appreciated in the last 5 months.


➔In addition, the increase in energy prices, which increases imports on a cost basis. Already in the 7-month period of the year, energy imports surpassed last year’s total energy imports.

Against the energy imports of 50.6 billion dollars in 2021, 55.6 billion dollars of imports were made in the 7 months of this year. According to the pioneering data for August, this amount increased to 64.3 billion dollars. It means 8 billion dollars of energy imports every month.

➔I wonder if energy imports will decrease in the last 5 months of the year?

In this respect, it is a good development that oil prices fall below $100.


However, rising natural gas prices are expected to increase further in the winter months.

The advantage to be gained from oil may be taken away by the rise in natural gas prices.

➔Because the cold weather and the increase in the use of natural gas in the houses will increase the energy import bill and will not allow the decrease that may come from oil.

Even if it does not increase or even decrease in real terms or in terms of quantity, imports may continue to increase in terms of amount due to price increases.

In exports, the business is getting difficult due to the recession in the economies on the European side. The slowdown in July and August are the first signs of this. It is stated that there is a significant decrease in orders.


As a result, imports will not decrease and exports will slow down, and the estimated 105 billion dollars foreign trade deficit may reach 120 billion dollars. This will be a record foreign trade deficit on an annual basis.

➔If the realization of the foreign trade deficit is to be like this, the current account deficit may rise 15 billion dollars instead of 47.3 billion dollars, exceeding 60 billion dollars to 62 billion dollars.

➔This means a current account deficit of 7.6 percent over the estimated $808 billion GDP in the Medium Term Program.

➔However, our national income estimate is one point higher than the OVP. We expect the GDP to be around 840 billion dollars with the annual average dollar rate of 16.62 TL, which is estimated by the program. According to this The ratio of current account deficit to national income may rise to around 7 percent.

➔At this level, the current account deficit is of course high and a source of risk for the economy. However, it is sustainable as long as it is financed. It is already given a deficit and then not financed, it is financed first and then imports are made.

In the 7-month period of the year, 24 billion dollars of net errors and omissions became the main item in the financing of the current account deficit. 24 billion dollars of the 36.7 billion dollars deficit was financed by net errors and omissions. Two-thirds of the financing and the amount is at a historical record.

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