Macroeconomic fragility increased in the first quarter of 2023 According to the Macroeconomic Imbalance Indicators established by TEPAV and updated on a quarterly basis, although employment indicators continued to improve, macroeconomic fragility increased due to the increasing current account deficit and private sector credit utilization in the first quarter of 2023.

Macroeconomic Imbalance Indicators Scoreboard which was established to strengthen the coordination between fiscal and monetary policies among European Union member states, to monitor macroeconomic policies and to improve the supervision of these policies were replicated for Turkey by TEPAV. The figures were updated following the publication of the source official statistics for the first quarter of 2023. Accordingly, while the rapid declines in external competitiveness indicators consisting of unit labor costs and real effective exchange rate continued in this quarter, the current account deficit indicator exceeded the threshold value for the first time after 2015 due to the increase in import expenditures well above export revenues, despite the partial increase in Turkey's share in world exports.

Private sector loans accelerated

In this quarter private sector loans accelerated and the related indicator exceeded the threshold value for the first time after 2017, on the other hand, it was observed that financial liabilities and housing price index indicators rose well above the threshold values, posing significant vulnerabilities for financial stability.

Headline unemployment rate remains in double digits

Updated indicators indicate that despite the positive trend in employment indicators, the fact that the headline unemployment rate remains at a double-digit level and the youth unemployment rate remains at a level close to twice that level, necessitates the continuation of the improvement in terms of establishing strong macroeconomic balances.

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