Özet:

The deficit in the current account is a phenomenon that increases the foreign dependency of the economy and thus its vulnerability to external shocks. Therefore, developing countries have to maintain stability in the current account in order to reach a sustainable growth rate. This necessity needs to be put forward in detail of the dynamics that create an interaction between economic growth and current account deficit in developing countries. Thus, policies that will achieve sustainable growth targets can be designed effectively without causing instability in the current account. Based on the facts determined above, the relationship between the current account deficit and economic growth in Turkey has been empirically investigated in this article. Accordingly, quarterly data between 2003 and 2019 were analysed using the Johansen Cointegration and Granger Causality Tests. Econometric results revealed that there is a bidirectional causality relationship between the national income and the current account deficit. This finding shows that an important vicious cycle has formed between economic growth and the current account deficit in Turkey that may result in a crisis. Therefore, quite comprehensive policies are needed to achieve the goal of sustainable growth in Turkey. In this framework, it is necessary to design policies that will eliminate the causality relationships both from national income to current account deficit and from current account deficit to national income.

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