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Deutsche Bank's Analysis On Turkey: We Expect Oil Prices To Be One Of The Key Risks |
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Written by Turkishpress.com
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Sunday, 05 February 2006 10:25 |
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''We do not expect the financing of the current deficit to be a significant issue this year provided the global sentiment and liquidity conditions remain unchanged. But we expect oil prices to be one of the key risks in 2006,'' the Deutsche Bank, an international investment bank, stated on Friday.
In its analysis on Turkey, the Deutsche Bank said, ''we have a current account deficit forecast of 6.2 percent of the gross domestic product (GDP), which is unchanged in comparison to 2005. We base this on the assumption that the average price of oil would remain 60 USD for a barrel this year. We do not expect the financing of the deficit to be a significant issue this year provided the global sentiment and liquidity conditions remain unchanged.''
''In case oil prices climb and stay at an average 70 USD for a barrel in 2006, we would revise our forecast to 7 percent of GDP,'' it said.
The bank noted, ''we expect foreign direct investments to pick up even further and exceed the 2005 figure of approximately 7 billion USD fairly comfortably at 12 billion USD. Nevertheless, we also expect foreign direct investments to drop in 2007 with the expected ease in privatization revenues, posing a risk to the currency.''
''We also expect first quarter inflation realization to be noticeably higher than the 5 percent official target on the back of a strong base-year effect. The ongoing rise in oil prices and sticky services sector pricing are key negatives. In the absence of a change in these factors, yearly inflation might reach the highest level of the year at end-March (approximately 8.5 percent) after which we expect to see a moderation,'' the bank added.
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