Turkey's dependence on foreign oil and gas has been the most significant reason why the country consistently registers a foreign trade deficit that results in a persistent current account deficit (CAD) and makes Turkey a net debtor to the rest of the world.

Turkey's foreign trade deficit surged dramatically in the January-July period of this year, alarming government authorities of the possibility of serious damage to the country's economy if the balance of payments fails to meet the gap between imports and exports in the face of an imbalanced growth for the two. However, an examination of the types of goods Turkey imported up until last month indicates that the country's foreign trade deficit stems mainly from its heavy energy dependence and that the country is in fact investing in the future, as indicated by the bulk of the remaining imports it has made.

In parallel to the rapid growth of its economy, Turkey's oil and bulk and cylinder natural gas imports have increased considerably. According to the Turkish Statistics Institute's (TurkStat) latest data, Turkey paid over $19 billion for oil and gas imported from abroad until August of this year, equaling some 19 percent of all imports and 54 percent of the CAD. The share of increase in the country's oil and gas bills in the same period registered at 48.3 percent and 11.4 percent, respectively. Turkey aims to eliminate its dependency on foreign energy supplies by 2023, the centennial of the modern republic.

Experts say a double-digit annual GDP growth is likely for the country. Nevertheless the rising CAD is a matter of concern for the government. What gives hope to policy makers is that the country's import of investment goods has also seen a notable increase of 24 percent in the January-July period of 2010 over the first seven months of last year. In the January-July period, Turkey imported $14.2 billion in investment goods, while total import of raw materials equaled $71.9 billion, up 34.7 percent from a year ago. Total volume of consumption goods imports, on the other hand, remained minor compared to these two, with $12.9 billion until August of this year.

Turkey's CAD increased by 89.4 percent in the first seven months of this year over the same period of 2009, despite a significant 13.4 percent rise in exports. Its total volume of exports in the January-July period was $64.4 billion, a 13.4 percent increase over the same period of last year. However, its imports saw an even higher jump, 32.1 percent, reaching $99.3 billion. These two seven-monthly numbers equate to a $34.9 billion CAD for the country this year, up 89.4 percent from $18.4 billion over the same period of 2009.