Turkey’s current account deficit can be reduced as seen below

Some opinion leaders in Turkey, including TIM Chair İsmail Gülle, point out that Turkey must be more creative in terms of getting engaged in foreign exchange earning activities. And they’re absolutely right. To prove that their argument is correct, we only need a small instance:

Recently, I’ve read an interesting piece of news covered by Anadolu News Agency, according to which, tourists that have visited Turkey in January-September spent 5.1 billion USD on food and beverage. As you may remember, I have previously expressed that Turkey must meet three key requirements in order to achieve its NEP target, which is “zero current account deficit”

  • Manufacturing Intermediate Goods in Turkey
  • Double the export value per kilogram
  • Increase the number of foreign exchange earning activities

The latter seems as the easiest target Turkey could achieve. According to TurkStat data, almost 40 million people visited Turkey within the last 9 months. 4.5 million out of these visitors are Turkish people living abroad. Consequently, Turkey’s recent tourism revenue reached nearly 26,6 billion dollar. As it is recorded that individual tourist expenditure exceeds 19.5 billion USD and the money that tourists spent on package tours is around 7 billion dollar, the accuracy of my argument above becomes even clearer. Apparently, Turkey gets its largest tourism revenue not from accommodation, but from other touristic activities.

Visitors spent more than 5 billion USD of their travel budget on food and beverages, and 4 billion 941 million USD on other goods and services. But the total amount they spent on accommodation is a mere 2 billion 838 million USD.

“Foreign exchange earning activities must be encouraged…”

By the way, there is another foreign exchange earning activity as well. Foreign visitors and Turkish citizens living abroad have spent a total of 793,5 million dollar on healthcare and health services; not to mention more than 319 million USD foreign exchange revenue from sporting, educational and cultural activities.

I strongly suggest those who complain about the excessive number of tourists in shopping malls to take a look at these numbers. Tourists spent almost 3 billion dollars on clothing and footwear, and a total of 1 billion dollar on souvenirs. And miscellaneous spending increased to an estimated $803 million. Visitors spent $96,7 million on Turkish rugs and carpets.

These numbers only cover a 9-month period. Accordingly, I expect a great amount of average annual expenditure by visitors. I believe that these figures give us enough insight into how to reduce current account deficit. Remember, this is the reason why the city of Bilbao chose building a museum instead of building housing complexes.

In short, with the right planning and the right regulations, we can increase the number of foreign exchange earning activities. Let’s not kill the golden goose of tourism.