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ECONOMIC OUTLOOK. MAY 2012. Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update:05/07/2012. OUTLINE. A- MACROECONOMIC OUTLOOK B- FOREIGN TRADE OUTLOOK 1) MERCHANDISE 2) SERVICES C- INVESTMENTS , FOREIGN CAPITAL and INCENTIVES D- FREE ZONES in TURKEY

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economic outlook

ECONOMIC OUTLOOK

MAY 2012

Economic Outlook is revized in the 1st and the 3rd weeks of the month.

Recent Update:05/07/2012

May 2012 Ministry of Economy

outline
OUTLINE

A- MACROECONOMIC OUTLOOK

B- FOREIGN TRADE OUTLOOK

1) MERCHANDISE

2) SERVICES

C- INVESTMENTS , FOREIGN CAPITAL and INCENTIVES

D- FREE ZONES in TURKEY

E- BILATERAL, REGIONAL, PLURILATERAL and MULTILATERAL TRADE

May 2012 Ministry of Economy

slide3

A- MACROECONOMIC OUTLOOK

May 2012 Ministry of Economy

growth forecasts for selected countries country groups
GrowthForecastsforSelectedCountries/Country Groups (%)

Source: IMF, OECD, UN, WB

  • Turkish Economy expanded by 8,5% in 2011.
  • According to the IMF, Turkish Economy is expected to grow by 2,3% in 2012.

May 2012 Ministry of Economy

forecasts for merchandise and services trade growth
Forecasts for Merchandise and Services Trade Growth (%)

Source: IMF and WTO

  • According to the IMF estimates, global trade volume of merchandise and services is expected to increase by 3.8% in 2012 and 5.4% in 2013.
  • According to the WTO estimates, global trade volume of merchandise and services is expected to increase by 3.7% in 2012 and 5.6% in 2013.

May 2012 Ministry of Economy

economic targets of 2012 2014 medium term programme
Economic Targets of 2012-2014 Medium Term Programme

*Forecast (Medium Term Programme, Ministry of Development – October 13, 2011)

  • Medium Term Programme aims to sustain economic growth, to decrease the current account deficit, and to preserve macroeconomic and financial stability.

May 2012 Ministry of Economy

real gdp growth of selected countries country groups 2011
Real GDP Growth of SelectedCountries/Country Groups (2011)

Source: TURKSTAT, IMF

  • Turkish Economy expanded by 8,5% in 2011, which was well beyond the expectations of the IMF (7.5%).

May 2012 Ministry of Economy

annual economic growth rates 2002 2011
AnnualEconomicGrowthRates (2002-2011)

* Forecast, Medium Term Programme Source:TURKSTAT

  • Turkey has recovered fast from the global financial crisis and amongstthose countries affected less from current global economic uncertainties.
  • Turkey has the fastest economic growth rates in Europe.
  • Mean annual growth rate between 2002 and 2011 was 6%.
  • Real GDP growth for 2011 realized as 8,5%.

May 2012 Ministry of Economy

gdp per capita
GDP Per Capita

Source: Dollar value is from TURKSTAT

  • GDP per capita has tripled in the last ten years from 3,492 USD to 10,444 USD. According to Purchasing Power Parity (PPP),GDP per capita came close to 16 thousand USD.

May 2012 Ministry of Economy

capacity utilization ratio
CapacityUtilizationRatio (%)

Source: TURKSTAT

  • Capacity utilization ratio realized as 74.7% in April 2012.

May 2012 Ministry of Economy

industrial production index
IndustrialProduction Index

Source: TURKSTAT

  • Industrial production index increased by 4.4% year-over-year in February 2012 up to 118.45

May 2012 Ministry of Economy

inflation annual percent change
Inflation (AnnualPercentChange)

Source: TURKSTAT

  • Annual inflation in 2011 realized as 10.4%.

May 2012 Ministry of Economy

real effective foreign exchange rate 2003 100
Real EffectiveForeign Exchange Rate (2003=100)

  Source: CBRT

  • As of April 2011, Turkish Lira has depreciated by 2.2% annually in terms of the CPI-based real effective exchange rate.
  • The level of depreciation is 4.9% in terms of the PPI-based real effective exchange rate.

May 2012 Ministry of Economy

total credits and consumer credits billion tl
Total Creditsand Consumer Credits (Billion TL)
  • Credits and specifically consumer credits increased in parallel to the growing domestic demand.
  • Total credits increased slightly on a monthly basis in March 2012.

May 2012 Ministry of Economy

cds premiums may 5th 2012
CDS Premiums (May 5th, 2012)

* Higher CDS premiums indicate higher risk levels.

  • CDS premium of Turkey is significantly low compared to most of the European countries.

May 2012 Ministry of Economy

financial markets
Financial Markets
  • Total assets of the banking sector increased by 20.6% and reached 1.22 trillion TL in February 2012.
  • Capital Adequacy Ratio of Turkish Banking Sector is 16,76% in January 2012.

May 2012 Ministry of Economy

eu defined budget deficit gdp
EU Defined Budget Deficit/ GDP (%)

2011

  • EU defined general government budget deficit/GDP ratio was 2.6% in Turkey in 2011 and Turkey satisfied the Maastricht criteria of 3%. Turkey also outperformed 18 EU Countries.
  • Central government budget deficit/GDP ratio was 1.3% in Turkey in 2011 and Turkey outperformed 23 EU Countries.
  • In January-March 2012, central government budget deficit has increased by %55.9 to 6.4 billion dollars.

May 2012 Ministry of Economy

government debt gdp
GovernmentDebt / GDP (%)
  • Debt/GDP ratio of Turkey was 39.4% in 2011, which was below the level in 21 EU Countries and the Maastricht Criteria (60%).

May 2012 Ministry of Economy

unemployment rates
UnemploymentRates (%)

Source: TURKSTAT

  • Unemployment rates have returned to the pre-crisis level.
  • In January 2012, the unemployment rate was 10.2%. Seasonally adjusted unemployment rate was 8.9%.
  • Seasonally adjusted unemployment rate in Euro Area was 10.9% and 10.2% in (EU27) in March.
  • Turkey has the 5th largest labor force among the European countries. (2009, World Bank)

May 2012 Ministry of Economy

potential of population 2010
Potential of Population (2010)

Source: World Bank

  • Turkey has a population of 74.7 million in which half of the population is under the age of 29.7.
  • Growth rate of population is 1.36% in Turkey, 0.28% in EU Countries and -0.24% in Germany.

May 2012 Ministry of Economy

growing dynamism in turkey s domestic market
GrowingDynamism in Turkey\'sDomestic Market
  • Cell phone penetration rate in households: 91.9%
  • Internet access rate in households: 42.9%
  • Internet access rate in enterprises: 90.9%
  • PC penetration rate in households: 34.3%
  • Laptop penetration rate in households: 22.6%
  • Digital camera penetration rate in households: 27.8%
  • Printer penetration rate in households: 14.0%
  • 1 of each 5 people owns a vehicle. (2010)

May 2012 Ministry of Economy

slide22

B- FOREIGN TRADE OUTLOOK

May 2012 Ministry of Economy

slide23

I) MERCHANDISE

May 2012 Ministry of Economy

targets in merchandise trade
Targets in MerchandiseTrade

* Actual (Source: TURKSTAT)

**Forecast: MediumTermProgramme, Ministry of Development- 13/10/2011)

May 2012 Ministry of Economy

turkey s share in global merchandise exports
Turkey\'sShare in Global MerchandiseExports (%)
  • Turkey’s share in global merchandise exports was %0.74 in 2011.

May 2012 Ministry of Economy

foreign trade volume gdp
ForeignTrade Volume/GDP (%)
  • The ratio of foreign trade volume/GDP was 48,7% in 2011.
  • Turkey’s integration to the international trade system is eminent.

May 2012 Ministry of Economy

foreign trade developments
ForeignTradeDevelopments

2009 - 2011 / 2011-2012 January-March

* Energy corresponds to Chapter 27.

Source:Ministry of Economy

  • In January- March 2012 compared to the same period of the previous year, exports increased by 12,6 % and imports decreased by 0,7% respectively.

May 2012 Ministry of Economy

monthly exports
MonthlyExports
  • In March 2012 compared to March 2011 exports have increased by 12,2% and imports have decreased by 4,8% and reached to the level of 13,3 and 20,6 billion dollar respectively.

May 2012 Ministry of Economy

distribution of foreign trade in broad economic categories
Distribution of ForeignTrade in BroadEconomicCategories

EXPORT

IMPORT

May 2012 Ministry of Economy

main export items
Main ExportItems

* Percent change is related to the annual change in exports in 2012.

Source: TURKSTAT

May 2012 Ministry of Economy

main import items
Main ImportItems

* Percent change is related to the annual chamge in imports in 2012.

Source: TURKSTAT

May 2012 Ministry of Economy

main trade partners january march 201 2
Main Import Partners (Share,%) Main Trade Partners (January-March2012)

Main Export Partners (Share,%)

Source: TURKSTAT

May 2012 Ministry of Economy

exports by regions
ExportsbyRegions

Source: TURKSTAT

May 2012 Ministry of Economy

import s by regions
Imports by Regions

Source: TURKSTAT

May 2012 Ministry of Economy

tariff rates
TariffRates

Source: WTO Tariff Profiles, 2011

May 2012 Ministry of Economy

slide36

2) SERVICES TRADE

May 2012 Ministry of Economy

targets in services
Targets in Services
  • Tourism:Besidesincreasingthenumber of touristarrivals, creating a structurethatimproves service quality, targetshigh-incomegroupsbydiversifying marketing channels, preservesnaturalcapitalandsustainability, andstimulatesthosetypes of tourismwhereTurkey has comparativeadvantages
  • Construction, Engineering-Architecture, Technical ConsultancyandContracting Services:Establishing a structurethatfitsTurkey’seconomicandsocialneeds, that is compatiblewithhightechnologyandinternationalrules, that is sensitivetoenvironment,thatcreateshighvalueadded, highforeignexchangeinflowandhighemployment, thatgrantshigh service quality, andthatrelies on qualifiedhumanandphysicalcapital.
  • Commercial Services: Increasingproductivityandcommercialtradevolumein a competitiveway, andtoencouragetechnologyandinnovation.

May 2012 Ministry of Economy

turkey s share in global services exports
Turkey\'sShare in Global Services Exports (%)

Source: WTO, CBRT

  • Turkey’s share in global exports of services was 0.92% in 2011.

May 2012 Ministry of Economy

balance of payments services
Balance of Payments - Services

*January-February

Source: CBRT

May 2012 Ministry of Economy

tourism statistics quarterly
TourismStatistics (Quarterly)

Tourists visited, Source: TURKSTAT

  • Turkey ranks as the 7th in the world and the 5th in Europe among the most favourite tourism destinations.
  • Turkey’s income per tourist increased by 18% in 2010 and 1% in 2011.

May 2012 Ministry of Economy

constructing services abroad
Constructing Services Abroad

Contributions to the overall economic performance: Creating foreign exchange inflow, exports, employment, technology transfer; adding to the machinery stock, facilitating internationalization

  • 31 out of the world’s top 225 constructing companies are Turkish.
  • Turkey ranks as the 2nd country (following China) in terms of the number of top constructing companies.

May 2012 Ministry of Economy

logistics
Logistics
  • Europe’s biggest truck fleet
  • (45 thousands trucks and 1,420 companies)
  • Almost 1 million flights in 2011
  • (2.3 million tonnes freight and 117 million passengers)
  • 25. biggest fleet in the world
  • 45 airports and 51 ports
  • Total length of divided highways will reach 15 thousand kilometers.
  • High-speed railway projects are carried out rapidly.

May 2012 Ministry of Economy

energy
Energy
  • Turkey is an energy hub between energy producer and consumer regions

May 2012 Ministry of Economy

investment climate in turkey
InvestmentClimate in Turkey

May 2012 Ministry of Economy

time r equired to s tart a b usiness
Time Requiredto Start a Business

Source: Invest In Turkey

  • The required time to start a business is 6 days in Turkey.

May 2012 Ministry of Economy

skilled labour availability
SkilledLabourAvailability

Source: Invest In Turkey

  • Scoring is between 0 and 10.

May 2012 Ministry of Economy

transparency in finance sector
Transparency in Finance Sector

Source: Invest In Turkey

  • Scoring is between 0 and 10.

May 2012 Ministry of Economy

the sectoral breakdown of foreign investments
TheSectoralBreakdown of ForeignInvestments

* January - February

Source: CBRT

May 2012 Ministry of Economy

breakdown of foreign investments by country
Breakdown of ForeignInvestmentsby Country

* January – February

Source: CBRT

May 2012 Ministry of Economy

investment incentive system
InvestmentIncentiveSystem
  • The current investment incentive system of Turkey is structured in four sub systems:
    • General Investment Incentive System
    • Regional Investment Incentive System
    • Investment Incentive System for Big Scale Projects
    • Incentives for Strategic Investments

May 2012 Ministry of Economy

investment incentives january february
InvestmentIncentives (January-February)

Source: General Directorate of Incentive Implementation and Foreign Investment

May 2012 Ministry of Economy

d free zones in turkey
D - FREE ZONES IN TURKEY

May 2012 Ministry of Economy

the advantages of free zones for users
TheAdvantages of FreeZonesforUsers
  • Tax advantages for manufacturers
  • Medium-and long-term investment view
  • Availability to transfer profits
  • Commercial facilities
  • Exemptiın from customs duties
  • Acquisition of the documents relating to the free movement of goods under the scope of Customs Union with the EU
  • Principle of equality
  • No time restrictions
  • Flexibility to adjust to the market needs and conditions
  • Reliable inflation accounting
  • Market access to domestic and foreign markets
  • Reduced bureaucratic procedures and dynamic business management
  • Strategic advantages.
  • Affordable and compatible infrastructure
  • Supply chain opportunities

May 2012 Ministry of Economy

free zones in turkey
FreeZones in Turkey
  • 54,022 people have been employed in Free Zones of Turkey in 2011.

May 2012 Ministry of Economy

trade flows of free zones
TradeFlows of FreeZones

*January-February

Source: General Directorate of Free Zones, Foreign Investments and Services

  • In January-February 2012 total trade volume of the Free Zones reached to 3.7 billion dollars, increasing 17 % annually.

May 2012 Ministry of Economy

concentration in free zones by industries
Concentration in FreeZonesbyIndustries

Source: General Directorate of Free Zones, Foreign Investments and Services

May 2012 Ministry of Economy

trade relationships of turkey with others
TradeRelationships of TurkeywithOthers
  • BilateralTradeRelationships of Turkey

Europe, Asia-Pacific, Eurasia, Middle East and North Africa, Sub-Saharan Africa, Americas

  • RegionalandMultipleTradeRelationships of Turkey

EU, ECO, D8, BSEC, OIC, COMCEC

  • MultilateralTradeRelationships of Turkey

WTO, OECD, ACTA

May 2012 Ministry of Economy

regional breakdown of exports
RegionalBreakdown of Exports

Source: TURKSTAT

* January-March ** Except Lebanon and Mauritius

In January-March period of 2012, our exports to OECD countries increased 7.2 % and our exports to FTA countries increased 25.8 % annually. The annual increase of our exports to EFTA countries in the same period was 72.7 % and EFTA countries became the fastest growing export destination of the regions above.

May 2012 Ministry of Economy

chronological evolution of the relationship between turkey and the eu
ChronologicalEvolution of theRelationshipbetweenTurkeyandthe EU
  • 12 September 1963: Ankara Agreement
  • 13 November 1970: The signing of the Additional Protocol
  • 1 January 1973: Additional Protocol to come into force
  • 14 April 1987: Turkey’s Application forMembership
  • 5 March 1995: The Association Council Decision Establishingthe Customs Union
  • 10-11 December 1999: Recognition of the Candidate Status of Turkeyat the Helsinki Summit
  • 8 March 2001: The first Accession Partnership Documentissued
  • 17 December 2004: European Council decision to start NegotiationswithTurkey in Brussels Summit
  • 3 October 2005: Start of theNegotiationsbetweenTurkeyandthe EU
  • 20 October 2005: Start of the ScreeningProcess
  • 13 October 2006: Endof the ScreeningProcess

May 2012 Ministry of Economy

the process of accession negotiations between turkey and the eu
Theprocess of AccessionNegotiationsbetweenTurkeyandthe EU

Negotiationsfor 1 chapterweretemporarilyopenedandclosedafterwards.

  • ScienceandResearch

Negotiationsfor 12 chapterwereopened but closurecriteriatoallthosenegotiationswereimposedbtthe EU.

  • Business andIndustryPolicy,
  • Statistics,
  • Financial Control,
  • Consumer andHealthProtection,
  • Trans-European Networks,
  • IntellectualPropertyLaw,
  • CompanyLaw,
  • FreeMovement of Capital,
  • Information Society and Media,
  • Taxation,
  • Environment,
  • Food Safety, Veterinary and Plant Health

Positionpapers of Turkeyfor 2 negotiationswereforwardedtothe EU. EU CommonPositionPaper is expectedto be announced.

  • EducationandCulture,
  • EconomicandMonetaryPolicy

Fortheopening of 8 chaptersopeningcriterias of the EU haveto be met byTurkey.

Inallotherchapters, ScreeningReportsareexpectedto be announcedbythe EU.

May 2012 Ministry of Economy

trade between turkey and the eu
TradebetweenTurkeyandthe EU

Source: Data Source of the Ministry of Economy

May 2012 Ministry of Economy

fta countries
FTA Countries
  • Egypt
  • Albania
  • Georgia
  • Montenegro
  • Serbia
  • Chile
  • Jordan
  • Lebanon*
  • Mauritius*

(*) Agreementsthatare in theapprovalprocess

  • EFTA (Norway, Switzerland, Iceland, Liechtenstein)
  • Israel
  • Macedonia
  • Croatia
  • BosniaandHerzegovina
  • Palestine
  • Tunisia
  • Morocco
  • Syria

May 2012 Ministry of Economy

trade with fta countries
Tradewith FTA Countries
  • Ourexportsto FTA Countriesincreased %7,2 in 2011.
  • Theshare of FTA Countries in total exportsreached 10%.
  • Turkeyrecorded a tradesurplus of 1,4 billion USD in 2011 withFTA Countries, whiletherewas a tradedeficit of 1.5 billion USD in 2002.

May 2012 Ministry of Economy

slide66

TradeRepresentativesAbroad

195 trade representatives from the Ministry are serving in 130 locations and 6 offices abroad.

May 2012 Ministry of Economy

slide67

Locations of TradeRepresentatives

AMERİKA

Buenos Aires

Karakas

Mexico City

Ottava

Santiago

Vaşington

Houston

Los Angeles

New York

Sao Paulo

Şikago

Toronto

Miami

San Francisco

Seattle

AFRİKA

Kahire

Nairobi

Pretoria

Rabat

Trablus

Tunus

Kazablanka

Abuja

Addis Ababa

Akra

Cezayir

Dakar

Darüsselam

Hartum

İskenderiye

ASYA

Taşkent

Tokyo

Ulan Bator

Yeni Delhi

Almatı

Guangzhou

Hong Kong Karaçi

Mumbai

Şangay

Georgetown

GEORGETOWN

Astana

Aşkabat

Bangkok

Bişkek

Cakarta

Duşanbe

Hanoi

İslamabad

Kabil

Kuala Lumpur

Manila

Pekin

Seul

Singapur

AVRUPA/KAFKASYA

AB

DTÖ

OECD

Atina

Bakü

Belgrad

Berlin

Bern

Bratislava

Brüksel

Budapeşte

Bükreş

Dublin

Helsinki

Kiev

Kişinev

Kopenhag

Lahey

Lizbon

Lefkoşa

Londra Lubliyana

Madrid

Minsk

Moskova

Oslo

Paris

Podgorica

Prag

Priştine

Roma

Saraybosna

Sofya

Stokholm

Tiflis

Tiran

Üsküp

Varşova

Viyana

Zagreb

Barselona

Batum

Düsseldorf

Hamburg

Hannover

Kazan

Marsilya

Milano

Münih

Novorossisk

Odessa

Rotterdam

Selanik

St. Petersburg

Stutgart

Birmingham

Krasnodar

Novosibirsk

Yekaterinburg

ORTA DOĞU

Daimi Temsilci Yardımcılığı

Abu Dhabi

Amman

Bağdat

Beyrut

Doha

Kuveyt

Manama

Muskat

Riyad

Sana

Şam

Tahran

Tel Aviv

Basra

Cidde

Dubai

Erbil

Halep

Kudüs

Musul

Tebriz

Ticaret Müşavirliği

AVUSTRALYA

Ticaret Ataşeliği

Sidney

Melbourne

İrtibat Büroları

May 2012 Ministry of Economy

projects with future prospects
ProjectswithFutureProspects
  • ExportOrientedProductionStrategyandInputSupplyStrategy
  • Market Access Strategy
  • SupportingExports
  • TradeRemedies
  • RestructuringtheIncentiveSystem
  • ImprovingtheInvestmentClimate
  • TradeAgreements
  • Next-GenerationFreeZones
  • Trade in Services andTurkishInvestmentsAbroad
  • Market SurveillanceandInspection
  • StrengtheningtheOrganizationAbroad

May 2012 Ministry of Economy

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