Top winner of falling oil prices concerned about Russian economy

Turkey is reported as the top winner of the falling oil prices while Russia struggles, yet Turkish businessmen have concerns of the deal’s effect on the Russian economy



While Turkey appeared to be the beneficiary of falling oil prices that have left Russia in trouble, the latest developments in the Russian economy may pose some unforeseen consequences for certain sections of the economy. Finance Minister Mehmet Şimşek had said that every $10 drop in oil prices would decrease the current account deficit by $4.5 billion to $5 billion while Economy Minister Nihat Zeybekci claimed that the contributions of the low oil prices would be visible by the end of December. The governor of the Central Bank, Erdem Başçı, said that a decrease of $10 in oil prices would decrease the inflation by around 0.4 to 0.5 percent. On the other hand, Turkish businessmen are concerned about the Russian economy, which has a strong influence on Turkish exports and the tourism sector.Considering that Turkey will be one of the countries most affected by the crisis in Russia that looks set to continue for a long time, Turkish Hotelier Federations' assistant chairman, Mehmet İşler, claimed that all hotel owners should remain cautious and refrain from lowerering their fees due to fears of the crisis in Russia. "If we lower the prices now, it will take around three years to recover from such a loss," he said. İşler said that in 2013, Russia passed Germany to become the country with the most amount of visitors to Turkey, with some 4,131,000 Russian tourists travelling to Turkey for vacation. This figure increased to 4,368,000 in 2014. However, İşler further claimed that since October, there has been a decline, and while they received a high number of reservations last year, this year has seen a 15 percent decrease in reservations. Meanwhile, according to several articles published by Turkish media outlets, Turkish exporter losses have reached 40 percent since the beginning of 2014, as the ruble plummeted against the U.S. Dollar. In particular, the fresh fruit and vegetables and poultry sectors were hopeful about increasing their shares within the Russian market with the sanctions. However, on Wednesday, five Turkish fresh fruit and vegetables exporters' unions made a joint statement regarding the "frightening" situation, asking for an immediate solution to cover their losses. The statement said that with the expectation that the exports to Russia would rise, the prices in the domestic market had increased dramatically and the exporters had had to buy the goods from that price range. The supply of goods from other countries was also higher than predictions, and Turkish exporters had had to make discounts to sell their goods within the Russian market.