Turkey's economy to be boosted by falling energy prices: analysts

ANKARA - Turkey's energy bill is expected to drop by half in 2015 if oil prices remain around the $50 per barrel mark, experts have said.

"Turkey's energy bill may decrease by $25bn in 2015 due to falling oil prices," said Muammer Komurcuoglu, an economist at the Istanbul wealth manager Is Yatirim.

"This would contribute to economic growth if the price of Brent crude oil averages $50 to $55 per barrel this year," he added. 

Turkey's energy bill is expected to total $55bn for 2014. 

"The Turkish economy would be positively affected by low oil prices since we are a net oil importer," agreed Banu Kivci Tokali, the director of research and investment advice at the Halk Yatirim investment firm. 

Oil prices have declined 60 percent in the last seven months, and have seen their fastest fall since 2008. 

The price of Brent crude oil fell more than five percent on Monday, and almost four percent on Tuesday, hitting $45.25 per barrel - its lowest level since March 2009.  

"Our analysis shows that our net energy imports may fall by 23-25 percent in 2015 if the price of oil remains steady around $50 per barrel," said Burak Kanli, the chief economist of investment advisor Finansinvest. 

Current account deficit to decrease

Another economist said that Turkey's current account deficit is expected to narrow in 2015 because of low oil prices.

"Turkey's energy deficit may narrow to $30bn in 2015 with falling oil prices," said Bora Tamer Yilmaz, an investment economist at Ziraat Bank. 

Yilmaz noted that Turkey's current account deficit is perceived as the most fragile aspect of its economy, and its recovery, due to low oil prices, would make the Turkish lira stronger. 

"Every $10 drop in oil prices reduces the current account deficit by $4.5bn," said Serkan Ozcan, head of Economic Research and Strategy of Odeabank. 

Ozcan also said that the ratio of current account deficit to gross domestic product may decrease to 3.9 percent in 2015 due to low oil prices.

"That ratio is expected to fall to 5.6 percent in 2014, from 7.9 percent in 2013," he added.

Agreeing with Ozcan, Tokali also stated that it is possible to see Turkey's current account deficit around four percent in 2015 due to low oil prices. 

"The decline in oil prices may have a positive impact of $15bn on the current account deficit this year, compared with 2014," said Kanli. 

Russian and Middle Eastern impact on Turkish economy

Komurcuoglu warned that low oil prices would have a negative effect on the economies of Russian and Middle Eastern countries, which are dependent on oil exports for most of their revenues. 

Turkey's tourism and foreign trade depend, for a considerable percentage, on Russia and the Middle East. So the Turkish economy may have a loss of some $11bn, according to Komurcuoglu.

Ozcan forecast that oil prices are expected to have an upward trend in the second half of the year to average $75 per barrel on average in 2015.