✔ The balance of payments is explained, but we focus not on the current account balance, which we should talk about, but on the record-breaking net errors and omissions.
✔ Net errors and omissions were 5.5 billion dollars in July and 24.3 billion dollars in seven months.
✔ Net error and missing indicates either that there is an inflow of foreign currency where it is not known where it will be written, or that the foreign currency entering the country is taken into account and cannot be fully reflected in the accounts.
The Central Bank announced the realization of the balance of payments in July and it was seen that the net errors and omissions are increasing at a record high. Net errors and omissions in July totaled 5.5 billion dollars. The amount in the first seven months reached $24.3 billion.
It has come to such a situation that the current account balance, which is an item that needs to be especially looked at and examined in the balance of payments, is almost in the background. The current account balance can already be predicted well and badly by looking at the previously announced foreign trade data and what will come from tourism, especially with the seasonal effect. As a matter of fact, the current account deficit of 4 billion dollars in July indicates a level in line with the forecasts. However, although it can be estimated, the balance of payments means the current account balance in a sense, this item needs to be looked at. However, our attention has now completely shifted to another item, to a clear error or omission.
Net errors and omissions, the amounts in both July and the first seven months are very, very high.
That’s why we’re asking, “What are we measuring wrong, but your net error and deficiency is getting so big” saying…
If the net error is omission-positive, an unmeasured foreign currency If the entry is negative, it indicates a foreign currency outflow. There is a foreign exchange inflow in our country, as there have been positive values in large amounts for years. But this is an insufficient explanation.
When there is an entry by seeing the net error omission as a separate foreign currency income-expense item. “It means that so many billions of dollars came from the net error omission item” gets us wrong.
A net error or omission is a balance item in the balance of payments. Foreign currency inflows and outflows in other items are added together; If this sum does not give zero, the difference is written with a reverse sign and the net error is written to the missing. Let’s give an example:
If the current account deficit is 100, the entry in the financial account must also be 100. But if the current account deficit is 100 and the entry in the financial account is 80, that is, there is a difference of 20, that amount creates a net error or omission. In this case, positive 20 is written to the net error omission.
It could also be reverse. The current account deficit is 100, the entry in the financial account appears to be 120, the difference will be written as minus this time, net error or omission.
Let’s give an example of how the net error and omission can be reduced this time, based on real numbers:
The first seven months of this year, the current account deficit is 36.7 billion dollars. Let’s ignore the small outflow in capital movements. Normally, there should have been an inflow of 36.7 billion dollars in the financial account. But it didn’t. The inflow in the financial account is $12.4 billion.
This has two meanings.
First; current account deficit is actually 36.7 billion dollar no less.
Latter; finance The inflow in his account is not $12.4 billion, but more.
How can the current account deficit be less than 36.7 billion dollars? For example, the travel income is not 14.4 billion dollars, there is an error in the measurement. Turkey has not earned 14.4 billion from this item, let’s say 19.4 billion in reality. In this case, the current account deficit suddenly drops to 31.7 billion dollars, and since the financial account is 12.4 billion, the net errors and omissions regress to 19.3 billion.
Within the scope of the current balance, not only the travel item, but also the delay in bringing the export price, and the fact that the foreign currency obtained from the transportation services is not fully reflected in the records may cause the net errors and omissions to grow.
The entry in the financial account may also appear understated, resulting in a net error or large error. There are dozens of items within the scope of the financial account.
If the $12.4 billion inflow in the financial account in the first seven months of this year is actually $17.4 billion, the $5 billion difference makes the net errors and omissions written so low.
Basically, this mistake should not be made.
While creating the balance of payments table, some items are not collected under the heading of net errors and omissions and are not written there. So the other items first; current balance, financial account, capital account are written; If their sum does not equal zero, the difference is recorded with an opposite sign, the net error is recorded in the omission.
THE MISSION FROM THE CENTRAL BANK
Net errors and omissions exist for all countries, not just us. The Central Bank attributes the high amount we have to the fact that the balance of payments statistics in Turkey are announced shortly after the data is generated. That is, the Central Bank “If we explain late, our net error will not be that much” brings it to say.
However, the net error and omission, which is stated to be high due to early disclosure, should be reduced over time by reflecting the amount to the related items.
This is not happening. Is there an explanation for not being able to scroll to the relevant items for 12 billion of 2011 and 23 billion of 2018?
the central bank “We are announcing early, that’s why” may continue to say, but it has to ensure that this amount decreases as time passes. At least, information should be given about the factors that caused such a record level of net errors and omissions in this period.
Informing the public about this issue by the Central Bank…
Are we expecting too much?