Turkey has moved rapidly from a current account that was relatively in balance up to the turn of the millennia, to sustaining relatively large current account deficits over the past 15 years. ... See More + Using annual data from 1986 to 2017 and a jackknife model-averaging estimator, the paper estimates the relationship between the current account balance and a set of determinants that are broadly consistent with the cross-country literature. These determinants include private sector credit, public expenditure, real exchange rate changes, gross domestic product growth relative to the rest of the world, trade openness, international oil prices, foreign direct investment levels, past net foreign assets, inflation volatility, and global levels of uncertainty. The analysis then decomposes the predicted current account balance for five-year periods to illustrate the factors that have driven the current account over time. Over 2003-07, a large current account deficit became established in Turkey, driven by an expansion of credit to households and rapid gross domestic product growth, coupled with improved macroeconomic stability that supported higher spending and therefore imports. Since then, the negative effect of household credit has abated, but was replaced in 2008-17 by an expansion of credit to the corporate sector as a driver of the current account deficit. The current account balance in Turkey is also found to be less persistent than is typically found in the cross-country literature, implying that it adjusts more rapidly in response to shocks.  See Less -

Document Type: Policy Research Working Paper Report No.: WPS8982 Document Date: AUG 15, 2019

Author: Knight,David Stephen; Portugal-Perez,Alberto; Nedeljkovic,Milan Disclosure Status: Disclosed

Document Type: Procurement Plan Report No.: STEP23379 Document Date: AUG 12, 2019

Author: G?khan G?rkem Disclosure Status: Disclosed

Document Type: Disbursement Letter Report No.: Document Date: AUG 08, 2019

Author: LEGKL Disclosure Status: Disclosed

Document Type: Implementation Status and Results Report Report No.: ISR37850 Document Date: AUG 07, 2019

Author: Erkan Orenbas,Esse Ayse Disclosure Status: Disclosed

Document Type: Implementation Status and Results Report Report No.: ISR38099 Document Date: AUG 04, 2019

Author: Faghi,Abdulaziz Disclosure Status: Disclosed

Document Type: Auditing Document Report No.: AUD0024119 Document Date: AUG 04, 2019

Author: Lalik,Zeynep Disclosure Status: Disclosed

Document Type: Auditing Document Report No.: AUD0024172 Document Date: AUG 04, 2019

Author: Lalik,Zeynep Disclosure Status: Disclosed

Document Type: Auditing Document Report No.: AUD0024278 Document Date: AUG 04, 2019

Author: Aroymak,Ayse Seda Disclosure Status: Disclosed

Document Type: Auditing Document Report No.: AUD0024291 Document Date: AUG 04, 2019

Author: Aroymak,Ayse Seda Disclosure Status: Disclosed

Document Type: Auditing Document Report No.: AUD0024321 Document Date: AUG 04, 2019

Author: Aroymak,Ayse Seda Disclosure Status: Disclosed