Internal and external imbalances increased in the second quarter of 2022, while the improvement in the labor market remained insufficient The 7th issue of TEPAV Macroeconomic Imbalance Indicators Bulletin has been published.

Following the publication of the source official statistics for the second quarter of 2022, the MIP Scoreboard has been updated. The updated indicators show that the current account balance tends to deteriorate, despite the strong competitive position supported by historically low levels of real effective exchange rate and unit labor costs. Although the leading data on the share of Turkey's export revenues in world exports imply a positive course in the first half of 2022, the indicator of the current account deficit reached the highest level of the last 4 years. Private sector loan utilization accelerated in this quarter, financial liabilities and housing price index indicators were well above the threshold values, while the unemployment rate indicator remained high. Although the indicators regarding the private sector and the General Government debt stock decreased slightly with the contribution of GDP growth and rapidly rising inflation, the fact that other internal imbalance indicators are on the rise and are at high levels indicate significant vulnerabilities towards financial stability. Despite the relative improvement observed in employment indicators in this period, the contraction in the labor force participation rate and high unemployment rates continue to be considered as factors of macroeconomic imbalances.

You may read bulletin from here.