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ECONOMIC OUTLOOK

ECONOMIC OUTLOOK. MAY 2013. Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update: 20/05/2013. 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

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  1. ECONOMIC OUTLOOK MAY 2013 Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update: 20/05/2013

  2. 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 2013 Ministry of Economy

  3. A- MACROECONOMIC OUTLOOK May 2013 Ministry of Economy

  4. Growth Forecasts for Selected Countries/Country Groups (%) Source: IMF, OECD, UN, WB • According to the IMF, Turkish Economy is expected to grow by 3.4% and 3.7% in 2013 and 2014 respectively. • In the 2012, Turkish economy grew by 2.2%. May 2013 Ministry of Economy

  5. Forecasts for Merchandise and Services Trade Growth (%) Source: IMF and WTO • According to the IMF estimates, global trade of merchandise and services is expected to increase by 3.5% in 2013 and 5.3% in 2014 in real terms. • According to the WTO estimates, global trade volume of merchandise and services is expected to increase by 3.3% in 2013 and 5.0% in 2014 in real terms. May 2013 Ministry of Economy

  6. Economic Targets of 2013-2015 Medium Term Programme *Forecast (Medium Term Programme, Ministry of Development – October 9, 2012) • Medium Term Programme which covers 2013-2015 period aims to strengthen macroeconomic and financial stability by reaching potential economic growth rate, decreasing the current account deficit further, reducing inflation and improving public fiscal balances. May 2013 Ministry of Economy

  7. Real GDP Growth of SelectedCountries/Country Groups (2012) Euro Area Source: TURKSTAT, IMF • Turkish Economy expanded by 2.2% in 2012. May 2013 Ministry of Economy

  8. AnnualEconomicGrowthRates (2002-2012) * 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. • Mean annual growth rate between 2002 and 2012 was 5.2%. • Real GDP growth for 2012 realized as 2.2%. May 2013 Ministry of Economy

  9. GDP Per Capita Source: Dollar value is from TURKSTAT, PPP GNI value from World Bank • Since 2002 GDP per capita has tripled from 3,519 USD to 10,609 USD. According to Purchasing Power Parity (PPP, current international $), GNI per capita surpassed 15 thousand international dollar which has the same purchasing power over GNI as a U.S. dollar has in the United States. May 2013 Ministry of Economy

  10. Capacity Utilization Ratio (%) Source: TURKSTAT • Capacity utilization ratio realized as 73.6 % in April 2013. May 2013 Ministry of Economy

  11. Industrial Production Index Source: TURKSTAT • Industrial production index increasedby 1.9% year-over-year in March 2013 upto 116 (2010=100). May 2013 Ministry of Economy

  12. Inflation (Annual Percent Change) Source: TURKSTAT • Annual inflation in 2012 realized as 6.16%. • Inflationwas 6.13% in April 2013. May 2013 Ministry of Economy

  13. Real EffectiveForeign Exchange Rate (2003=100)   Source: CBRT • As of April 2013, Turkish Lira has appreciated by 0.88% in terms of the CPI-based real effective exchange rate and depreciated by 0.17% in terms of the PPI- based real effective exchange rate. May 2013 Ministry of Economy

  14. Total Creditsand Consumer Credits (Billion TL)   Source: BRSA • Credits and specifically consumer credits increased in parallel to the growing domestic demand. • Total credits increased 2.25% on a monthly basis in March 2013. May 2013 Ministry of Economy

  15. CDS Premiums (May 16th, 2013) Source: DB Research * Higher CDS premiums indicate higher risk levels. • CDS premium of Turkey is significantly low compared to most of the European countries. May 2013 Ministry of Economy

  16. Financial Markets   Source: BRSA • Comparing to previous year, total assets of the banking sector increased by 16.2% and reached 1.428 trillion TL in March 2013. • Capital Adequacy Ratio of Turkish Banking Sector is 17.42% in March 2013. May 2013 Ministry of Economy

  17. 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 2.0% in Turkey in 2012. • In January-April 2013 period, central government budget deficit was 302 million Turkish Liras. May 2013 Ministry of Economy

  18. GovernmentDebt / GDP (%) • Debt/GDP ratio of Turkey was 36.1% in 2012, which was below the level in 24 EU Countries and the Maastricht Criteria (60%). May 2013 Ministry of Economy

  19. UnemploymentRates (%) Source: TURKSTAT • InFebruary2013, theunemployment rate was 10.5%. Seasonallyadjustedunemployment rate was 9.2%. • Seasonallyadjustedunemployment rate in Euro Areawas 12.1% and 10.9% in (EU27) in March 2013. Interms of unemploymentratioTurkeyoutperformed 15 EU countriesaccordingtocurrent data. • AfterRussia, Germany, Englandand France, Turkey has the 5th largestlaborforceamongtheEuropeancountries. (2011, World Bank) May 2013 Ministry of Economy

  20. Potential of Population (2011) Source: World Bank (2011), TURKSTAT (2012) • Turkey has a population of 75.6 million in which half of the population is under the age of 30.1. • Growth rate of population is 1.2% in Turkey, 0.3% in EU Countries and -0.1% in Germany. May 2013 Ministry of Economy

  21. GrowingDynamism in Turkey'sDomestic Market • Cell phone penetration rate in households: 93.2% (2012) • Internet access rate in households: 47.2% (2012) • Internet access rate in enterprises: 92.5% (2012) • PC penetration rate in households: 31.8% (2012) • Laptop penetration rate in households: 27.1% (2012) • Digital camera penetration rate in households: 27.1% (2012) • Printer penetration rate in households: 14.0% (2011) • 1 of each 5 people owns a vehicle.(2011) May 2013 Ministry of Economy

  22. B- FOREIGN TRADE OUTLOOK May 2013 Ministry of Economy

  23. I) MERCHANDISE May 2013 Ministry of Economy

  24. Targets in MerchandiseTrade * Actual (Source: TURKSTAT) **Forecast: MediumTermProgramme, Ministry of Development- 10/09/2012) May 2013 Ministry of Economy

  25. Turkey'sShare in Global MerchandiseExports (%) Source: WTO • Turkey’s share in global merchandise exports was 0.83% in 2012. May 2013 Ministry of Economy

  26. ForeignTrade Volume/GDP (%) • The ratio of foreign trade volume/GDP was 49.5% in 2012. • Turkey’s integration to the international trade system is eminent. May 2013 Ministry of Economy

  27. ForeignTradeDevelopments 2011 - 2012 / January-March 2012 - 2013 * Energy corresponds to Chapter 27. Source: Ministry of Economy • In January-March period of 2013 compared to same period of 2012, exports increased by 5% and imports increased by 5% respectively. May 2013 Ministry of Economy

  28. MonthlyExports/Imports • In March 2013 compared to same period of 2012, exports have decreased by 0.3% and realized as 13.2 billion dollar and imports have decreased by 0.6% down to the level of 20.6 billion dollar. May 2013 Ministry of Economy

  29. Distribution of ForeignTrade in BroadEconomicCategories EXPORT IMPORT May 2013 Ministry of Economy

  30. Main ExportItems * Percent change is related to the annual change in exports in 2013. Source: TURKSTAT May 2013 Ministry of Economy

  31. Main ImportItems * Percent change is related to the annual change in imports in 2013 Source: TURKSTAT May 2013 Ministry of Economy

  32. Main Import Partners (Share,%) Main Trade Partners (January-February2013) Main Export Partners (Share,%) Source: TURKSTAT May 2013 Ministry of Economy

  33. ExportsbyRegions Source: TURKSTAT May 2013 Ministry of Economy

  34. Imports by Regions Source: TURKSTAT May 2013 Ministry of Economy

  35. TariffRates Source: WTO Tariff Profiles, 2012 May 2013 Ministry of Economy

  36. 2) SERVICES May 2013 Ministry of Economy

  37. 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 2013 Ministry of Economy

  38. Turkey'sShare in Global Services Exports (%) Source: WTO, CBRT • Turkey’s share in global exports of services was 0.97% in 2012. May 2013 Ministry of Economy

  39. Balance of Payments - Services *January-March Source: CBRT May 2013 Ministry of Economy

  40. TourismStatistics (Quarterly) Tourists visited, Source: TURKSTAT • Turkey ranks as the 6th in the world and the 4th in Europe among the most favourite tourism destinations. • Turkey’s income per tourist increased by 2.6% in 2012 compared to 2011. May 2013 Ministry of Economy

  41. Contracting 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 contracting companies are Turkish. • Turkey ranks as the 2nd country (following China) in terms of the number of top contracting companies. May 2013 Ministry of Economy

  42. Logistics (2012) • Europe’s biggest truck fleet • (45 thousands trucks and 1,420 companies) • Almost 1.1 million flights in 2012 • (2.4 million tonnes freight and 130 million passengers) • 25. biggest fleet in the world • 48 airports and 76 ports • Total length of divided highways will reach 15 thousand kilometers. • High-speed railway projects are carried out rapidly. May 2013 Ministry of Economy

  43. Energy • Turkey is an energy hub between energy producer and consumer regions May 2013 Ministry of Economy

  44. C- INVESTMENTS, FOREIGN CAPITAL and INCENTIVES May 2013 Ministry of Economy

  45. InvestmentClimate in Turkey May 2013 Ministry of Economy

  46. Time Requiredto Start a Business Source: Invest In Turkey • The required time to start a business is 6 days in Turkey. May 2013 Ministry of Economy

  47. SkilledLabourAvailability Source: Invest In Turkey • Scoring is between 0 and 10. May 2013 Ministry of Economy

  48. Finance Skills Source: Invest In Turkey • Scoring is between 0 and 10. May 2013 Ministry of Economy

  49. TheSectoralBreakdown of ForeignInvestments * January-March Source: CBRT May 2013 Ministry of Economy

  50. Breakdown of ForeignInvestmentsby Country * January-March Source: CBRT May 2013 Ministry of Economy

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