DYNAMIC RELATIONS BETWEEN BANK LOAN VOLUME AND GDP IN THE TURKISH ECONOMY

Abstract

Although there is a general belief that there is a positive relationship between credit volume and GDP in national economies, it is important to evaluate the proportional size of the credit directed to the market and the inflationary environment together. Credit expansion can generally be analyzed in two different ways, separately for companies and households. Companies increase the production capacity in the economy by increasing their investment levels with the loans they use from banks, while households increase the local demand by increasing their consumption level more with the loans they use from banks. In this study, the dynamic relations between the credit volume of banks and GDP were investigated in Turkey. In the 2012-2022 period, the loan volume and the GDP quarterly data of 10 deposit banks operating in Turkey were used. The relationship between credit volume and GDP is analyzed with two models, nominal and real series. Data were analyzed using time series models. According to econometric findings; It has been determined that nominal loan volume and nominal GDP in Turkey mutually affect each other as of the period examined. However, the same effect was not observed between real credit volume and real GDP. Although real credit volume affects real GDP, there is no opposite effect. When the series is adjusted for the inflationary effect, it is concluded that GDP does not have any causal effect on the expansion of banks' credit volume. However, in any case, the increase in credit volume; contributes positively to economic growth.