Turkey's commitment to a three-year anti-inflation program is preventing it from raising domestic oil prices to reflect the global surge. But officials are confident that higher world oil prices will not affect Turkish macroeconomic equilibria and markets, at least in the short term.
Despite the International Monetary Fund's (IMF) conclusion in its World Economic Outlook report that higher oil prices had resulted in a greater-than-expected rise in inflation and current account deficit, market analysts said there was no need for a crisis in Turkey due to the successful
implementation of the IMF-backed stabilization program.
Cumhur Timucin of Kocbank said that higher oil prices would make their mark by slowing growth rates in Europe - especially in Germany. He pointed out, however, that the Turkish economy was not affected by global developments so directly.
An analyst from Demirbank predicted that oil prices would go up to $40 a barrel and oil-importing countries would intensify pressure on member countries of the Organization of Petroleum Exporting Countries (OPEC) and that conditions in winter would make things more difficult for Europe.
However, economist Halik Burumcekci from Disbank said the present widening of the current account deficit was endangering economic stability and it was entirely possible that when current account figures for August are announced in October, markets would panic.
He said the government expects oil prices to go down to $25 but this has not yet occurred and he expected no rise in fuel prices due to the government's commitment to inflation targets. – (Albawaba-MEBG)
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