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ECONOMIC OUTLOOK

ECONOMIC OUTLOOK. April 2012. Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update:04/12/2012. 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

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  1. ECONOMIC OUTLOOK April 2012 Economic Outlook is revized in the 1st and the 3rd weeks of the month. RecentUpdate:04/12/2012

  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 April 2012 Ministry of Economy

  3. A- MACROECONOMIC OUTLOOK April 2012Ministry of Economy

  4. 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 2,2% in 2012. April 2012 Ministry of Economy

  5. Forecasts for Merchandise and Services Trade Growth (%) Source: IMF • 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. April 2012 Ministry of Economy

  6. EconomicTargets of 2012-2014 MediumTermProgramme *Forecast (MediumTermProgramme, Ministry of Development – October 13, 2011) • MediumTermProgrammeaims to sustaineconomicgrowth, to decrease the currentaccountdeficit, and to preservemacroeconomicandfinancialstability. April 2012 Ministry of Economy

  7. Real GDP Growth of SelectedCountries/Country Groups (2010) Japan Source: TURKSTAT, IMF andcountries’ statisticsoffices * Data forIndia is IMF estimate. • Turkish Economyexpandedby 8.5% in 2011, whichwaswellbeyond the expectations of the IMF (7.5%). April 2012 Ministry of Economy

  8. 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 5.4%. • Real GDP growth for 2011 realized as 8.5%. April 2012Ministry of Economy

  9. GDP Per Capita Source: Dollar value is from TURKSTAT, PPP Dollar value is from World Bank • GDP percapita has tripled in the lastten yearsfrom 3,492 USD to 10,444 USD. According to PurchasingPowerParity (PPP),GDP percapitasurpassed15 thousandUSD. April 2012 Ministry of Economy

  10. CapacityUtilizationRatio (%) Source: TURKSTAT • Capacity utilization ratio realized as 73.1% in March 2012. April 2012 Ministry of Economy

  11. IndustrialProduction Index Source: TURKSTAT • Industrialproductionindexincreasedby4.4% year-over-year in February 2012 up to 118.5 April 2012 Ministry of Economy

  12. Inflation (AnnualPercentChange) Source: TURKSTAT • InMarch 2012 compared to the sameperiod of the previousyear, CPI has increasedby %10.4 percentand PPI has increasedby %8.2. April 2012Ministry of Economy

  13. Real EffectiveForeign Exchange Rate (2003=100)   Source: CBRT • As of March 2011, Turkish Lira has depreciated by 1.5% annually in terms of the CPI-based real effective exchange rate. • The level of depreciation is 3.1% in terms of the PPI-based real effective exchange rate. April 2012 Ministry of Economy

  14. Total Creditsand Consumer Credits (Billion TL) • Creditsandspecificallyconsumercreditsincreased in paralleltothegrowingdomesticdemand. • Total creditsincreasedslightly on a monthlybasis in February2012. April 2012Ministry of Economy

  15. CDS Premiums (10 April 2012) • Higher CDS premiums indicate higher risk levels. • PIIGS: Portugal, Irland, Italy, Greece, Spain • CDS premium of Turkey is significantlylowcompared to most of the Europeancountries. April 2012 Ministry of Economy

  16. Financial Markets • As of September 2011, 194,739 people were employed and 10,501 branches were operatingin Turkish banking sector. • Total assets of the banking sector increased by 20.6% and reached 1.214 billion TL in January-September 2011. • Liquid assets have increased by 62.3% due to the escalation in the Required Reserve Ratios (RRR). • As of September 2011, Turkish banking sector was operating in 31 countries including banks, other financial corporations and off-shore branches. • As of September 2011, Capital Adequacy Ratio of Turkey is 16.4%. Though there is a declining trend in CAR, it is still far above the legal minimum level (8%) and even 12%, which is the announced target ratio of Banking Regulation and Supervision Agency. • 90.6% of the legal equities are common equities, which are considered as the safest type of capital. April 2012 Ministry of Economy

  17. Budget Deficit/ GDP (%) * 2011 • 22 EU countriescouldn’tsatisfy the Maastricht criteria (3%) in 2010. • Central governmentbudgetdeficit/GDP ratiowas1.3% in Turkey in 2011. • InJanuary-February 2012, centralgovernmentbudget had a 900 milliondollarsdeficit. March2012Ministry of Economy

  18. GovernmentDebt / GDP (%) • Debt/GDP ratio of Turkey was 39.4% in 2011, which was below the level in 18 EU Countries and the Maastricht Criteria (60%). April 2012 Ministry of Economy

  19. UnemploymentRates (%) Source: TURKSTAT • Unemploymentrateshavereturnedtothepre-crisislevel. • In 2011, theannual rate of unemploymentocurred 2.1 pointslessthan a yearearlierandrecorded as 9.8%. • Unemployment rate in the Euro Zoneandwas10.8% in February 2012. • Turkeyhas the 5th largestlaborforceamong the Europeancountries. (2009, World Bank) April 2012Ministry of Economy

  20. Potential of Population (2010) Source: World Bank • Turkey has a population of 74.7 million in whichhalf of thepopulation is undertheage of 29.2. • Growth rate of population is 1.36% in Turkey, 0.28% in EU Countriesand -0.2% in Germany. April 2012Ministry of Economy

  21. 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 penetrationrate in households: 34.3% • Laptop penetrationrate in households: 22.6% • Digital camera penetrationrate in households: 27.8% • Printer penetration rate in households: 14.0% • 1 of each 5peopleowns a vehicle. (2011) April 2012Ministry of Economy

  22. B- FOREIGN TRADE OUTLOOK April 2012Ministry of Economy

  23. I) MERCHANDISE April 2012Ministry of Economy

  24. Targets in MerchandiseTrade * Actual (Source: TURKSTAT) **Forecast: MediumTermProgramme, Ministry of Development- 13/10/2011) April 2012Ministry of Economy

  25. Turkey'sShare in Global MerchandiseExports (%) • Turkey’sshare in global merchandiseexportswas %0.74 in 2011. April 2012Ministry of Economy

  26. 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. APRIL 2012 Ministry of Economy

  27. ForeignTradeDevelopments 2009 - 2011 / 2011-2012 January-February * Energy corresponds to Chapter 27. Source:Ministry of Economy • InJanuary- February 2012 compared to the sameperiod of the previousyear, exportsandimportsincreasedby 12,9 % and 1,9% respectively. March 2012Ministry of Economy

  28. MonthlyExports • InFebruary 2012 comparedtoFebruary 2011 exportsandimportshaveincreasedby 17,1% and 1,1% andreachedtothelevel of 11,8 and 17,7 billiondollarrespectively. April 2012Ministry of Economy

  29. Distribution of ForeignTrade in BroadEconomicCategories EXPORT IMPORT April 2012 Ministry of Economy

  30. Main ExportItems * Percent change is related to the annual change in exports in 2012. Source: TURKSTAT April 2012Ministry of Economy

  31. Main ImportItems * Percent change is related to the annual chamge in imports in 2012. Source: TURKSTAT April 2012 Ministry of Economy

  32. Main Import Partners (Share,%) Main Trade Partners (January-February 2012) Main Export Partners (Share,%) Source: TURKSTAT April 2012Ministry of Economy

  33. ExportsbyRegions Source: TURKSTAT April 2012Ministry of Economy

  34. Imports by Regions Source: TURKSTAT April 2012 Ministry of Economy

  35. TariffRates Source: WTO Tariff Profiles, 2010 April 2012 Ministry of Economy

  36. 2) SERVICES April 2012Ministry 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. April 2012 Ministry of Economy

  38. Turkey'sShare in Global Services Exports (%) Source: WTO, CBRT • Turkey’sshare in global exports of serviceswas 0.92% in 2011. April 2012 Ministry of Economy

  39. Balance of Payments - Services *January-February Source: CBRT April 2012 Ministry of Economy

  40. TourismStatistics (Quarterly) Tourists visited, Source: TURKSTAT • Turkey’sincomepertouristincreasedby 18% in 2010 and 1% in 2011. April 2012Ministry of Economy

  41. 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. April 2012Ministry of Economy

  42. 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. April 2012Ministry of Economy

  43. Energy • Turkey is an energy hub between energy producer and consumer regions April 2012Ministry of Economy

  44. C- INVESTMENTS, FOREIGN CAPITAL and INCENTIVES April 2012Ministry of Economy

  45. InvestmentClimate in Turkey April 2012Ministry of Economy

  46. Time Requiredto Start a Business Source: Invest In Turkey • The required time to start a business is 6 days in Turkey. April 2012Ministry of Economy

  47. SkilledLabourAvailability Source: Invest In Turkey • Scoring is between 0 and 10. April 2012Ministry of Economy

  48. Transparency in Finance Sector Source: Invest In Turkey • Scoring is between 0 and 10. April 2012 Ministry of Economy

  49. TheSectoralBreakdown of ForeignInvestments * January - February Source: CBRT April 2012 Ministry of Economy

  50. Breakdown of ForeignInvestmentsby Country Source: CBRT April 2012 Ministry of Economy

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