ANKARA
Declining oil prices will have significant positive effects on Turkey’s current account deficit and inflation next year, Economy Minister Nihat Zeybekci said Tuesday.
Addressing a press conference at the “Exports Oriented Production Strategies” forum, Zeybekci said the positive effects of the steep decline in oil prices would be observed in the current account deficit figures, starting from December.
The minister said Turkey had managed to reduce its current account deficit by 37 percent during the Jan.-Oct. period year-on-year without the support of drop in oil prices. He added that the new prices would help further reduce the deficit and curb inflation.
“The drop in oil prices will have very positive effects on our current account deficit if the average oil prices stay near $75 per barrel,” Zeybekci said. “This will minimize current account deficit $12 billion.”
He also predicted that declining oil prices would help Turkey reduce consumer prices inflation by 1.5 points next year.
The consumer prices inflation in Turkey was 9.15 percent in November year-on-year, according to the Turkish Statistical Institute, a figure well above the Central Bank of Turkey’s five percent medium-term target.
Low oil prices ease external pressures on Turkey: Fitch
The fall in oil prices will reduce external pressures on Turkey and India because it will hold down headline inflation, said International credit ratings agency Fitch on Tuesday.
"Lower oil prices will increase the pressure on developing countries’ credit rating. The prices will benefit consumption in developed markets, hold down headline inflation and ease external pressures in large energy importers such as Turkey and India. There are other exceptions in emerging markets, where reform has boosted growth or lowered vulnerability to crises," Fitch said in its official website.
Fitch said that global growth will pick up some pace and the countries credit outlook will be constant in 2015.
"Outlooks on global sovereign ratings are more evenly balanced than they were at the end of 2013 when there were twice as many negative as positive outlooks," the agency added.
According to Fitch, the balance of outlooks in the Eurozone points to a mild improvement in credit quality and crisis-hit countries started to recover and rebalance.
Fitch also drew attention to China’s deceleration in the economic growth rate and said that it expects China to slow, Russia to enter a recession and Brazil to post a sluggish recovery.
The credit ratings agency stressed that future elections, which will be held in 2015 in Spain, Portugal and Greece pose risks to the policy direction of these countries.
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