Abstract:

Abstract enAfter chronic problems of Turkish economy start to gradually disappear, the current account deficit problem attracts more and more attention. The current account deficit becomes the most important risk for the economy because it gets unsustainable last five year. It seems like the main reason of current account deficit problem of the Turkish economy is the lack of investment-saving balance. Savings-investment imbalance does not result from high-level of investment but from extraordinary low savings. For removing current account deficit, increasing national savings is crucial. For increasing the volume of savings, there are some critical elements such as raising income level, ensuring fairness in income distribution and reducing import dependency in the industry. The depth and effectiveness of financial market, per-capita income, taxation, real interest rates and demographical factors such as dependency rate, level of education and urbanization are discussed to affect the volume of saving rate. A solution based on new private pension system can cure the increasing saving rate problems in the Turkish economy

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