Risk Management Interest Rates-Oil Prices & Growth
Low oil prices = high growth , High interest rates = Low growth
The question of our April comment looking for the answer, is it the reason why the oil price come dawn just because of the decreasing World economy growth or is it as a result of decreasing World economy growth the oil prices come dawn .
Now, the question is low oil prices = ascending economical growth and High interes rates = Low ecomomical growth .
After the oil prices came dawn dramaticly all the authorities and press begin to write Turkey’s current account deficit will be affected positively, on the other side it seems to be forgetten a sustaniable current account deficit can be lowered structurely by industrial products export. In reality industry prefer their choice through rent economy just because of the economical policies, in other words to survive their industrial business they depend on the big income of rent economy. We also seem to forget that Turkey’s export have a big share to oil exporting countries
What about World economy, economic growth rates decreasing almost all of the oil exporting countries, accompaning with oil prices. It is also same as devolep countries. Expactation of growth for 2015 through these countries are negatif except USA. Consequently, decrasing the growth of World economy from 2010 keeping its trend. (BDIndex)
Upon one approach ,because of high interest rates credit costs are expensive and business world avoid to invest, incase of low interest rates investment will increase , According to another aproach , to allow hot money, currency and enflation must be controlled and the capital problem of the country can be managed by this opportunity. If this is the reality then how will the % 50 decrease of invesment can be explained against for the low real interest rates between 2007 – 2015. ( For this period real interest rate was % 13 and investments rised about % 40 and now the real interest rate is % 2 but the rise of investment is about % 20 )
Both the countries and SME’s which have a great role at countries economies should have a good risk management to supply confident – sustaniable and consistent growth. This culture must be established by common sense and by collective intelligence.
Democracy, law , peace , science are the parts of this common sense for the countries while innovation, transparency, team work , dicipline, organization and proffesional consultancy are the parts of this common sense for SME’s .
BCD in this context giving consulting service to SME’s to provide a sustainable and consistant economical growth.