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Heavy energy bill: 48 billion dollars

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In this time Whatever the name of the most important problem in the Turkish economy is, the citizen’s answer is likely to be inflation and the cost of living.. In the first half of the year, consumer price inflation rose to 78.62% and producer prices increased by 138.31%. Higher figures since 1994. I will address this issue tomorrow with wages, salaries and pensions.

For those who manage the economy and the country The most important problem in the economy is probably foreign currency liquidity. Because almost every week a measure or a decision is made on this issue. With these decisions, which profoundly affect both the financial markets and production and trade, we are gradually moving away from the market economy. It also represents a serious regulatory risk for companies and economic actors.

EXPORT IS IN PROGRESS BUT …

The growing foreign trade deficit is behind the increase in foreign exchange needs this year. Foreign trade data for the first half of the year have just been announced. Let’s take a look at what the final mid-year picture is and where we’re headed.

➔According to the pioneering data of the Ministry of Commerce In the first half of the year, exports increased by 20% to 128.9 billion dollars. Compared to the same period of the previous year, the increase was 21 billion dollars and last year’s exports rose to 246.2 billion dollars.

➔According to the average, we have increased monthly exports by $ 3.5 billion to $ 21 billion in 2022. When you look at export, a bright picture emerges.

IMPORT IS WORKING IN FRONT

➔ However, the import data on the second side of the coin shows the opposite of exports. 6 months imports increased from $ 126.1 billion last year to $ 177.2 billion this year. The increase reached 40.4 percent with $ 51.2 billion.

➔We imported an average of $ 29.5 billion every month. This is compared to $ 21 billion in imports. This means an additional $ 8.5 billion monthly deficit in imports and foreign trade.

The latest import figure in a year increased to $ 322.6 billion in June. With an annual export of $ 246.2 billion, The difference was $ 76.4 billion. This is the deficit level reached in the middle of the year.

➔Export is fast, but imports are moving forward.

➔The second half of the year is similar to the first half, and if energy prices don’t fall, the $ 50 billion trade deficit could grow that much, and We can go up to $ 100 billion.

Of course, revenues from services such as tourism, transport and healthcare will reduce the transformation of this deficit into a current account deficit. But how far away? Let’s say it reduced by $ 60 billion, there is still $ 40 billion left.

INVOICE AT 6 MONTHS EQUAL TO A PAST YEAR

➔We have once again allocated a foreign trade deficit of over $ 100 billion. This year was 2011. It was a time when growth broke a record 11.1% and capital flows were historically strong. It was conveniently financed.

➔We have now come to the end of the era of abundant and cheap money in the world. Capital flows weakened. Net capital flows to our country have already reversed.

➔Weakening of direct capital inflows. All the burden goes on exports and foreign exchange earnings from services. This is a development that reduces foreign currency liquidity.

➔Another reason for the squeezing of foreign currency liquidity is that we are going through a period of sharp increases in the prices of raw materials and especially energy in the world.

➔ Looking at the data at 6 months Compared to the previous year, the foreign trade deficit was $ 30.2 billion more. Almost all of this $ 29.1 billion increase is due to increased energy imports. ➔ Turkey’s energy imports of $ 18.7 billion in 6 months in 2021 increased to $ 47.8 billion in the first half of this year. The 6-month increase reached 155%.

➔ More importantly, energy imports of $ 47.8 billion in the first half of this year are on a par with total energy imports from previous years.

OIL WILL DETERMINE TWO CRITICAL DATA

➔This increase in the foreign trade deficit is due to the rise in oil prices. As of the first half of the year, the average oil price per barrel has jumped from $ 75.74 last year to $ 105.66 this year. This price increase led to a $ 29 billion increase in Turkey’s energy imports.

➔ Energy prices will play a decisive role in the deficit of the second half of the year. If oil prices continue to stay above $ 100 on average, the energy bill will also rise. In this case, both the foreign trade deficit and the energy bill could reach $ 100 billion.

➔Energy prices determine not only the foreign trade deficit, the level of the exchange rate, but also the level of inflation. The only element that exceeds 100 percent of annual price increases are energy prices. The fact that world prices remain high will also increase inflation in Turkey.

In summary, the course of the two most important problems in the economy depends on oil prices.

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