The expert warned that it is "inevitable" for the economy.

Professor Dr. Ferhat Pehlivanoğlu, a faculty member at Kocaeli University, evaluated the situation with Abdurrahman Yazıcı at Haberler.com. Pehlivanoğlu stated that the current account balance is essentially the backbone of the economy in Turkey. He emphasized that structural reform is inevitable in this regard.

Economy Editor Abdurrahman Yazıcı asked his guest what the latest data on current transactions means. Professor Dr. Ferhat Pehlivanoğlu pointed out that the current account deficit is one of Turkey's chronic problems. He highlighted Turkey's dependence on energy imports and continued his statements as follows:

"CURRENT ACCOUNT DEFICIT IS A STRIKING INDICATOR OF DEPENDENCY"

Data from November 2024 once again revealed the chronic problems in Turkey's economy regarding the current account balance and financing structure. After a five-month hiatus, the current account deficit reached a level of 2 billion 871 million USD. Excluding gold and energy, the current account balance showing a surplus of 3 billion 443 million USD is a striking indicator of Turkey's dependence on energy imports.

When looking at the details of the current account deficit, it is seen that the defined foreign trade deficit in the balance of payments has reached 5 billion 235 million USD. On an annual basis, the total deficit in the foreign trade balance was realized at a level of 54.6 billion USD. This picture shows that exports are still not sufficient to cover imports at the desired level and that foreign trade remains one of the weakest points of the Turkish economy.

"TOURISM PLAYS A VITAL ROLE IN BALANCING THE CURRENT ACCOUNT DEFICIT"

Economy Editor Abdurrahman Yazıcı asked how the revenues from the service sector and tourism affect the current account deficit. Professor Dr. Pehlivanoğlu noted that tourism plays an important role in reducing the current account deficit, stating:

In November, net inflows from the services balance reached 3 billion 725 million USD. Travel revenues constituted the majority of this surplus (with a contribution of 2 billion 630 million USD), while transportation services also brought in a net income of 1 billion 338 million USD. Turkey's tourism sector plays a vital role in balancing the current account deficit. However, it is also important to emphasize the need to eliminate seasonality in these revenues and to develop alternative tourism areas.

Developing special services for health tourism, congress tourism, and digital nomads (digital nomads are individuals who use technology to perform their jobs or businesses without being tied to any physical location) will increase the sector's foreign currency earning potential. It should also be noted that this sector presents a structure that supports Turkey's soft power.

"DIRECT INVESTMENT ENTRIES MUST BE INCREASED"

In financing the current account deficit, net direct investments contributed 4.2 billion USD, while portfolio investments reached a notable level of 14.1 billion USD. Portfolio investments recorded a net inflow of 1 billion 229 million USD in November, supported by purchases of 39 million USD in the stock market and 1 billion 645 million USD in the government bond market. However, these short-term capital inflows should also be considered as a factor that increases vulnerability in the economy.

On the direct investment side, it is seen that there was an inflow of 1 billion 139 million USD from foreign residents to Turkey. In contrast, domestic residents increased their investments abroad by 557 million USD. This picture indicates that direct investment inflows need to be increased.

"DOMESTIC ENERGY SOURCES MUST BE UTILIZED"

In November, the foreign trade balance showed a deficit of 5 billion 235 million USD. This deficit indicates that energy imports play a significant role. It is essential for Turkey to prioritize renewable energy projects that will reduce its dependence on energy imports. The utilization of domestic energy sources and the implementation of policies aimed at promoting energy conservation can help mitigate this issue.

In the Central Bank reserves, a net increase of 1 billion 327 million USD was recorded in November. However, the fact that this increase is supported by short-term capital inflows and borrowing may raise questions about the sustainability of the reserves.

"MONETARY POLICY MUST BE IMPLEMENTED IN LINE WITH INFLATION TARGETS"

In December 2024, Turkey's inflation rate was realized at 44.38%. High inflation negatively affects both consumer confidence and the investment environment. Undoubtedly, as permanent decreases in inflation occur in the future, this situation will reverse. The Central Bank of the Republic of Turkey (CBRT) has set the policy interest rate at 47.5%. However, in a high inflation environment, decreases in interest rates may harm price stability. In this regard, cautious optimism prevails in the markets. Implementing monetary policy in line with inflation targeting is critically important for achieving macroeconomic stability.

ADVICE ON GOLD FROM THE EXPERT

As of November 2024, the Turkish economy continues to struggle with structural problems in the current account deficit and financing structure. While the services balance and current surplus excluding gold and energy reveal the positive aspects of the economy, the foreign trade deficit and dependence on short-term capital inflows increase vulnerabilities.

In this context, policies that reduce energy dependence will be important. Renewable energy projects should be supported, and investments in domestic resources should be increased. Value-added production appears to be critically important; technology-oriented exports should be increased, and the production structure should be transformed. Diversification of tourism in Turkey is another area we need to work on more, and investments should be made in alternative areas of the service sector. Policies that ensure financial stability have become more valuable; dependence on short-term capital inflows should be reduced, and direct investments should be encouraged. Finally, the fight against inflation should be carried out uncompromisingly; effective use of monetary policy should be ensured, and price stability should be the primary goal. All these developments can reduce Turkey's current account balance problem in the long term and strengthen the foundations of economic stability. However, adopting structural reforms and a sustainable policy-based approach is critical on this path.