So, it seems Türkiye has around $ 90 billions trade deficit this year if wiki numbers were to be believed.
So, Türkiye earns around $ 45-50 billions in tourism and then There is around $12-15 billions of FDI.
How then remaining $ 20-25 billions deficit is compensated? From service sector? Or do they have to pay from foreign reserve?
Edit- my knowledge in economics is less than basic. So, i maybe getting this totally wrong.
Assuming current account deficit is ~10% of GDP for 2023 (about same as 2022), we can determine some rough numbers:
(Can use google translate)
data.tuik.gov.tr
The current ("short term") account includes all net flow of goods, services (incl tourism) and incomes (incl remittances, ownership dividends etc) with rest of the world.
Intuitive to understand positive direction is foreigner(s) buying or paying for Turkish things (goods, services, labour wages, rents etc) in the "now".
Current and capital account sum to zero (in the oldest conventional definition I learned in IB Economics long time ago now)
Similar to say how kinetic energy and potential energy sum to zero in say a gravity field.
i.e Current account is the kinetic material actualisation of international transactions and the capital account is the potential (essentially ownership and stock in the capacity side) side of it.
Chicken and the egg situation as to which drives/causes the other (they are both essentially a loop that exist together as duality)
So about +100 billion will show up on the capital account side if the current account is - 100 billion.
The components on capital ("long term") account side include:
(+ direction is always foreigner(s) owning more Turkish long term capacity)
A) Investment :
FDI (equity investment), FPI (portfolio investment).... assuming about 13 billion each (2022 figures from world bank) is 26 billion in total.
Fair enough assumption as its unlikely there is any huge structural change this year in World:Turkiye investment climate and contours.
B) Loans (+ amount is change in dollar owed from TR to world) - TBD (to be determined)
C) Reserve change (+ amount is change in forex from TR to world) - TBD
i.e the TBDs for 2023 will add to about 74 billion.
So getting about 74 billion in loans (in the one year) would keep reserve change as zero....i.e maintain level at 80 billion USD (at start of 2023). Figure not incl. gold (about 40 billion USD total I think), but that can be ignored for now as little changes occurring to gold reserve and it is low liquidity as its really a last resort reserve for forex conversion purpose....it is used more as backing collateral.
Getting more loans than this over 2023 would increase the forex past that starting level (registering as a negative in the summation, since foreigners would own less Turkish long term capacity w.r.t forex situation)
Getting less means the forex level ends lower than 80 billion at end of year (the change registering as positive for the reverse situation).
Right now there has been a drop of 10 billion to 70 billion as of July start.
So we can assume of the half year completed so far, that there is ~ 37 billion in the 2 TBD summation so far.
i.e about 27 billion in loans have been taken by Turkiye in international currencies (namely USD and maybe some Euro) so far in the year and a 10 billion drop in forex has occured so far.
The assumed current account deficit can be increased or decreased to get figures to vary within a bound. Gold can be considered more liquid to bring it into the calculation similarily. Increasing/decreasing FDI and FPI (from 2022 results) can also be done for wiggle room analysis and impact on loans needed etc.
i.e The actual numbers (and the TBDs) of course will have some +/- to them as we made assumptions based on 2022 repeating just for reference sake.
Some team in TR central bank likely already done a more detailed analysis (with the broader, deeper, more real time resolution+sensitivity data they have access to) and the confidence intervals involved to give a priority assessment to executive branch policy w.r.t foreign overture diplomacy being done now.
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