Turkey is primary victim of oil above $80 – WSJ

Turkey is the biggest victim of oil prices about $80 per barrel because it imports nearly all the oil it consumes, the Wall Street Journal said.

Higher oil prices could tip the entire economy into a recession. Most economists were already predicting such a downturn when energy costs were lower.

Oil prices are now at their highest since November 2014 after major oil producers decided to keep output steady. In Turkey, a slump in the lira’s value of about 40 percent this year means oil prices have almost doubled and are at the highest level on record.

Faced with a weaker lira, while Turks are likely to buy more cars, refrigerators and computers locally, consumers can’t do the same with local gas and oil, the newspaper said. Inflation in the country is at 17.9 percent and is set to climb higher, paring demand and hurting economic growth.

Turkey’s construction industry is already grinding to a halt. The government may be able to cut fuel taxes to protect households and firms in the short term, but it can’t afford to do that for long because of budgetary constraints and pledges to cut spending.