Finance Minister Mehmet Şimşek yesterday described the recent decline in commodity prices and particularly in oil as a great development for Turkey, noting that Turkey is one of the few countries which will benefit considerably from falling oil prices, during an interview by Bloomberg News in London. Şimşek remarked that the 36 percent fall per barrel of Brent crude oil is likely to remove Turkey, which imports most of its energy needs, from international credit rating agencies' tracking list, enabling Turkey to become a center of attention for foreign investors once again.
Şimşek underscored that this decline in oil prices will contribute positively to lessen the country's external deficit, restrain inflation and improve growth. "The reason why many analysts speak about vulnerability in the Turkish economy is the large current account deficit. Every drop of $10 in oil prices will decrease the current account deficit by $4.5 to $5 billion. Furthermore, this decline means bringing down inflation by 40 base points and hiking growth up by 30," Şimşek added. Currently, we do not have any plans such as reflecting this fall to consumers, Şimşek said, continuing, "We are not thinking of reducing taxes in oil products. The last thing we want is adding budgetary deficit to the current account deficit in an atmosphere where a kind of normalization is expected in the U.S.'s monetary policies. So we are being quite cautious in financial terms."