In the third quarter of 2022, the current account deficit accelerated and internal imbalance indicators indicated potential risks toward financial stability The 9th issue of TEPAV Macroeconomic Imbalance Indicators Bulletin has been published.

Following the publication of the official statistics for the third quarter of 2022, the MIP Scoreboard has been revised. The updated indicators show that the decreases in unit labor costs accelerated in this quarter and the real effective exchange rate maintained its high negative values despite the rapidly rising inflation. In spite of the strong competitive position implied by the historically low levels, the leading data on Turkey's share in world exports point to a loss of momentum in the export rate, and the deterioration in the current account balance, which started as of 2022, is accelerating. Hence, the indicator of the current account deficit reached the highest level of the last 4 years as of the third quarter of 2022. On the other hand, 4 out of 6 internal imbalance indicators took values outside the threshold value in this quarter; private sector credits accelerated, financial liabilities and house price index indicators rose well above the threshold values, while the unemployment rate indicator maintained its high levels. With the contribution of GDP growth and rapidly rising inflation, the indicators regarding the private sector and the General Government debt stock decreased slightly in this quarter. However, remaining internal imbalance indicators are on the rise and are at high levels, and therefore, indicate significant vulnerabilities threatening financial stability. Despite the partial improvement observed in labor market indicators, the contraction in the labor force participation rate and persistent high unemployment rates continue to be the main factors of macroeconomic imbalances.

You may read bulletin from here.