ISTANBUL
The World Bank estimates a favorable picture for Turkey in 2015, as the growth rate estimate remained at 3.5 percent with the help of a slump in oil prices that led to a lower inflation rate, according to its latest projections.
"The slump in oil prices is definitely good news for Turkey," said Martin Raiser, the World Bank's Country Director for Turkey, speaking at the development lender's report for Turkey regarding its 2015 prospects in Istanbul on Friday.
The price of oil estimated at $70 per barrel "would improve the current account balance by 1.1 percent of GDP, lower inflation by close to 1 percent, increase growth by 0.5 percentage point," according to Raiser.
The bank's global forecasts, initially announced on Jan. 13, see an inflation rate of 6.2 percent this year, coming down from 8.17 percent in 2014 and a growth rate of 3.5 percent in GDP.
The Turkish GDP growth forecast remained the same compared to the previous report, although the bank downgraded the global growth forecast to 3.0 percent from 3.4 percent from the June 2014 report, due to the stagnant economies of European countries and Japan, and a slowdown in Chinese growth.
The World Bank saw the U.S. Federal Reserve's interest rate decision in 2015 as a downward risk for emerging economies, including Turkey, as investors could withdraw from those countries for higher profits in the world's biggest economy.
The head of Turkish Industry Business Association, Cansen Basaran Symes, said during her speech that the effects of the rate increase in the U.S. would be limited, as she does not expect a serious rise in borrowing costs.
Symes also called for an end to the interest rate discussion in Turkey, as Turkish President Recep Tayyip Erdogan called for lower interest rates from the central bank.
Erdogan defends that a sharp cut in interest rates would boost investment and production, while the central bank points at high inflation rates as the reason for acting prudently on reducing the rates.
Symes stressed the independence of the central bank, while critics claim that Erdogan's remarks might influence the bank's decision-making.
"I wish the recent developments, which confuse the public opinion and business world, would end soon," she said.
