IS THE CURRENT ACCOUNT SURPLUS IN GULF ECONOMIES SUSTAINABLE? AN EMPIRICAL ANALYSIS FOR UNIT ROOT TEST WITH TWO STRUCTURAL BREAKS

As the current deficit damages economy more than the current accounts surplus, the researchers generally concentrate on the current accounts deficit and its sustainability. The current accounts deficit of the USA, which gives the highest deficit, matches with the current accounts surpluses of Germany, China, Japan and oil-exporting countries. As the oil can be consumed, the renewable energy sources begin to take the place of the oil, the decrease in demand of oil with the slowdown at the global growth leading by China and India and the decrease in the oil incomes with the increase in oil supply at the other countries cause distress in the economies of the Gulf Countries. In this point, the examination of the sustainability of the current account surplus also gains importance. In this respect, this study, in which the sustainability of the current account balance of the Gulf Economies having current account surplus and in the position of oil exporters were tested, is a partake of the contribution to the literature. This paper analysis sustainability of the current account surplus of Gulf Economies between the years 1980-2016 by utilising the minimum LM unit root test for stationary. As per the outcomes, the unit root null hypothesis could be rejected, it is a constant process in Bahrain, Iran, Kuwait and United Arab Emirates. The results obtained are also important for the policymakers