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MINISTRY of ECONOMY ECONOMIC OUTLOOK APRIL 2013 Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update: 26/04/2013.

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Presentation on theme: "MINISTRY of ECONOMY ECONOMIC OUTLOOK APRIL 2013 Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update: 26/04/2013."— Presentation transcript:

1 MINISTRY of ECONOMY ECONOMIC OUTLOOK APRIL 2013 Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update: 26/04/2013

2 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 OUTLINE April 2013 Ministry of Economy 2

3 A- MACROECONOMIC OUTLOOK April 2013 Ministry of Economy 3

4 Growth Forecasts for Selected Countries/Country Groups (%) 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%. Source: IMF, OECD, UN, WB April 2013 Ministry of Economy 4

5 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. Forecasts for Merchandise and Services Trade Growth (%) Source: IMF and WTO April 2013 Ministry of Economy 5

6 Economic Targets of Medium Term Programme *Forecast (Medium Term Programme, Ministry of Development – October 9, 2012) Medium Term Programme which covers 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. April 2013 Ministry of Economy 6

7 Real GDP Growth of Selected Countries/Country Groups (2012) Turkish Economy expanded by 2.2% in Source: TURKSTAT, IMF, EuroStat, IBGE, April 2013 Ministry of Economy 7 Euro Area

8 Annual Economic Growth Rates ( ) * Forecast, Medium Term Programme Source:TURKSTAT Turkey has recovered fast from the global financial crisis and amongst those 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%. April 2013 Ministry of Economy 8

9 GDP Per Capita Source: Dollar value is from TURKSTAT, PPP GNI value from World Bank Since 2002 GDP per capita has tripled from 3,492 USD to 10,504 USD. According to Purchasing Power Parity (PPP, current international $), GNI per capita surpassed 17 thousand international dollar which has the same purchasing power over GNI as a U.S. dollar has in the United States. April 2013 Ministry of Economy 9

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

11 Industrial Production Index Source: TURKSTAT Industrial production index increased by 1.59 % year-over-year in February 2013 up to (2010=100). April 2013 Ministry of Economy 11

12 Inflation (Annual Percent Change) Annual inflation in 2012 realized as 6.16%. Inflation was 7.29% in March Source: TURKSTAT April 2013 Ministry of Economy 12

13 Real Effective Foreign Exchange Rate (2003=100) As of March 2013, Turkish Lira has appreciated by 0.23% and 0.57% monthly in terms of the CPI-based and PPI- based eal effective exchange rate respectively. Source: CBRT April 2013Ministry of Economy 13

14 Total Credits and Consumer Credits (Billion TL) Credits and specifically consumer credits increased in parallel to the growing domestic demand. Total credits increased %3.21 on a monthly basis in March April 2013 Ministry of Economy 14 Source: BRSA

15 CDS Premiums (Apr. 25th, 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. April 2013 Ministry of Economy 15

16 Financial Markets Comparing to previous year, total assets of the banking sector increased by 14.41% and reached trillion TL in February Capital Adequacy Ratio of Turkish Banking Sector is 17.63% in February April 2013 Ministry of Economy 16 Source: BRSA

17 EU Defined Budget Deficit/ GDP (%) 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 In January-March 2013 period, central government budget deficit was 897 million Turkish Liras. * 2011 April 2013 Ministry of Economy 17

18 Government Debt / 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%). April 2013 Ministry of Economy 18

19 Unemployment Rates (%) In January 2013, the unemployment rate was 10.6%. Seasonally adjusted unemployment rate was 9.4%. Seasonally adjusted unemployment rate in Euro Area was 12.0% and 10.9% in (EU27) in February In terms of unemployment ratio Turkey outperformed 15 EU countries according to current data. After Russia, Germany, England and France, Turkey has the 5th largest labor force among the European countries. (2011, World Bank) Source: TURKSTAT April 2013 Ministry of Economy 19

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 Growth rate of population is 1.2% in Turkey, 0.3% in EU Countries and - 0.1% in Germany. 20 April 2013 Ministry of Economy

21 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) Growing Dynamism in Turkey's Domestic Market April 2013 Ministry of Economy 21

22 B- FOREIGN TRADE OUTLOOK April 2013 Ministry of Economy 22

23 I) MERCHANDISE April 2013 Ministry of Economy 23

24 Targets in Merchandise Trade * Actual (Source: TURKSTAT) **Forecast: Medium Term Programme, Ministry of Development- 10/09/2012) April 2013 Ministry of Economy 24

25 Turkey's Share in Global Merchandise Exports (%) Turkeys share in global merchandise exports was %0.83 in April 2013 Ministry of Economy 25 Source: WTO

26 26 Foreign Trade Volume/GDP (%) The ratio of foreign trade volume/GDP was 49.5% in Turkeys integration to the international trade system is eminent. April 2013Ministry of Economy

27 Foreign Trade Developments In January-February period 2013 compared to same period of 2012, exports increased by 8.3% and imports increased by 8.3% respectively. Source: Ministry of Economy April 2013Ministry of Economy / January-February * Energy corresponds to Chapter 27.

28 Monthly Exports/Imports April 2013Ministry of Economy 28 In Febuary 2013 compared to same period of 2012 exports have increased by 5.8% and reached to the level of 12.4 billion dollar and imports have increased by 9% up to the level of 19.4 billion dollar.

29 Distribution of Foreign Trade in Broad Economic Categories EXPORT 29 IMPORT April 2013Ministry of Economy

30 Main Export Items Source: TURKSTAT 30 * Percent change is related to the annual change in exports in April 2013Ministry of Economy

31 Main Import Items Source: TURKSTAT 31 * Percent change is related to the annual change in imports in 2013 April 2013Ministry of Economy

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

33 Exports by Regions Source: TURKSTAT April 2013 Ministry of Economy 33

34 Imports by Regions Source: TURKSTAT April 2013 Ministry of Economy 34

35 Tariff Rates Source: WTO Tariff Profiles, 2012 April 2013 Ministry of Economy 35

36 2) SERVICES April 2013 Ministry of Economy 36

37 Tourism: Besides increasing the number of tourist arrivals, creating a structure that improves service quality, targets high-income groups by diversifying marketing channels, preserves natural capital and sustainability, and stimulates those types of tourism where Turkey has comparative advantages Construction, Engineering-Architecture, Technical Consultancy and Contracting Services: Establishing a structure that fits Turkeys economic and social needs, that is compatible with high technology and international rules, that is sensitive to environment, that creates high value added, high foreign exchange inflow and high employment, that grants high service quality, and that relies on qualified human and physical capital. Commercial Services: Increasing productivity and commercial trade volume in a competitive way, and to encourage technology and innovation. Targets in Services April 2013 Ministry of Economy 37

38 Turkey's Share in Global Services Exports (%) Source: WTO, CBRT Turkeys share in global exports of services was 0.97% in April 2013 Ministry of Economy 38

39 Balance of Payments - Services *January-February Source: CBRT April 2013 Ministry of Economy 39

40 Tourism Statistics (Quarterly) April 2013 Ministry of Economy 40 Tourists visited, Source: TURKSTAT Turkey ranks as the 6th in the world and the 4th in Europe among the most favourite tourism destinations. Turkeys income per tourist increased by 1% in 2011 and remained the same in 2012.

41 Contracting Services Abroad out of the worlds top 225 contracting companies are Turkish. Turkey ranks as the 2nd country (following China) in terms of the number of top contracting companies. Contributions to the overall economic performance: Creating foreign exchange inflow, exports, employment, technology transfer; adding to the machinery stock, facilitating internationalization April 2013 Ministry of Economy

42 Logistics (2012) 42 Europes 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. April 2013 Ministry of Economy

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

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

45 Investment Climate in Turkey 45 April 2013 Ministry of Economy

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

47 Skilled Labour Availability Scoring is between 0 and 10. Source: Invest In Turkey 47 April 2013 Ministry of Economy

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

49 The Sectoral Breakdown of Foreign Investments Source: CBRT * January-February April 2013 Ministry of Economy 49 January- February 2013

50 Breakdown of Foreign Investments by Country Source: CBRT 50 * January-February April 2013 Ministry of Economy

51 Investment Incentive System 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 Encouraging the Strategic Investments 51 April 2013 Ministry of Economy

52 Investment Incentives (January-March) Source: General Directorate of Incentive Implementation and Foreign Investment 52 April 2013 Ministry of Economy

53 D - FREE ZONES IN TURKEY 53 April 2013 Ministry of Economy

54 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 The Advantages of Free Zones for Users 54 April 2013 Ministry of Economy

55 Free Zones in Turkey 55,938 people have been employed in Free Zones of Turkey in April 2013 Ministry of Economy

56 Trade Flows of Free Zones In 2012 total trade volume of the Free Zones reached to 23.1 billion dollars, increasing 1.8% annually. Source: General Directorate of Free Zones, Foreign Investments and Services 56 April 2013 Ministry of Economy

57 Concentration in Free Zones by Industries Source: General Directorate of Free Zones, Foreign Investments and Services 57 April 2013 Ministry of Economy

58 E - BILATERAL, REGIONAL, PLURILATERAL and MULTILATERAL TRADE 58 April 2013 Ministry of Economy

59 Trade Relationships of Turkey with Others Bilateral Trade Relationships of Turkey Europe, Asia-Pacific, Eurasia, Middle East and North Africa, Sub-Saharan Africa, Americas Regional and Multiple Trade Relationships of Turkey EU, ECO, D8, BSEC, OIC, COMCEC Multilateral Trade Relationships of Turkey WTO, OECD, ACTA 59 April 2013 Ministry of Economy

60 Regional Breakdown of Exports Source: TURKSTAT * January-February ** Except Lebanon,Mauritius and Korea In January-February period of 2013, our exports to EFTA countries decreased by 61.3% and our exports to FTA countries decreased by 13.6% annually. The annual increase of our exports to Turk Republics in the same period was 29.9% and Turk Republics became the fastest growing export destination of the regions above. 60 April 2013 Ministry of Economy

61 Chronological Evolution of the Relationship between Turkey and the 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: Turkeys Application for Membership 5 March 1995: The Association Council Decision Establishing the Customs Union December 1999: Recognition of the Candidate Status of Turkey at the Helsinki Summit 8 March 2001: The first Accession Partnership Document issued 17 December 2004: European Council decision to start Negotiations with Turkey in Brussels Summit 3 October 2005: Start of the Negotiations between Turkey and the EU 20 October 2005: Start of the Screening Process 13 October 2006: End of the Screening Process 61 April 2013 Ministry of Economy

62 The process of Accession Negotiations between Turkey and the EU Negotiations for 1 chapter were temporarily opened and closed afterwards. – Science and Research Negotiations for 12 chapter were opened but closure criteria to all those negotiations were imposed bt the EU. – Business and Industry Policy, – Statistics, – Financial Control, – Consumer and Health Protection, – Trans-European Networks, – Intellectual Property Law, – Company Law, – Free Movement of Capital, – Information Society and Media, – Taxation, – Environment, – Food Safety, Veterinary and Plant Health Position papers of Turkey for 2 negotiations were forwarded to the EU. EU Common Position Paper is expected to be announced. – Education and Culture, – Economic and Monetary Policy For the opening of 8 chapters opening criterias of the EU have to be met by Turkey. In all other chapters, Screening Reports are expected to be announced by the EU. 62 April 2013 Ministry of Economy

63 Trade between Turkey and the EU *January-February Source: Data Source of the Ministry of Economy 63 April 2013 Ministry of Economy

64 1.EFTA (Norway, Switzerland, Iceland, Liechtenstein) 2.Israel 3.Macedonia 4.Croatia 5.Bosnia and Herzegovina 6.Palestine 7.Tunisia 8.Morocco 9.Syria (**) FTA Countries 10.Egypt 11.Albania 12.Georgia 13.Montenegro 14.Serbia 15.Chile 16.Jordan 17.Lebanon* 18.Mauritius*** 19.South Korea**** (*) Agreements that are in the approval process (**) Pending (***) Will enter into force on 1st June 2013 (****) Will enter into force on 1st May April 2013 Ministry of Economy

65 Our exports to FTA Countries increased %7.2 in The share of FTA Countries in total exports reached %9.6. Turkey recorded a trade surplus of 3.9 billion USD in 2012 with FTA Countries, while there was a trade deficit of 1.5 billion USD in Trade with FTA Countries 65 April 2013 Ministry of Economy

66 Trade Representatives Abroad 208 trade representatives from the Ministry are serving in 105 locations and 8 offices abroad. 66 April 2013 Ministry of Economy

67 Daimi Temsilci Yardımcılığı Ticaret Müşavirliği Ticaret Ataşeliği İrtibat Büroları AFRİKA Kahire Nairobi Pretoria Rabat Trablus Tunus Kazablanka ASYA 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 Yekaterinbur g Taşkent Tokyo Ulan Bator Yeni Delhi Almatı Guangzhou Hong Kong Karaçi Mumbai Şangay Georgetown Abuja Addis Ababa Akra Cezayir Dakar Darüsselam Hartum İskenderiye Buenos Aires Karakas Mexico City Ottava Santiago Vaşington Houston Los Angeles AMERİKA ORTA DOĞU Abu Dhabi Amman Bağdat Beyrut Doha Kuveyt Manama Muskat Riyad Sana Şam Tahran Tel Aviv Basra Cidde Dubai Erbil Halep Kudüs Musul Tebriz Sidney Melbourne AVUSTRALYA New York Sao Paulo Şikago Toronto Miami San Francisco Seattle GEORGETOWN Locations of Trade Representatives 67 April 2013 Ministry of Economy

68 Export Oriented Production Strategy and Input Supply Strategy Market Access Strategy Supporting Exports Trade Remedies Restructuring the Incentive System Improving the Investment Climate Trade Agreements Next-Generation Free Zones Trade in Services and Turkish Investments Abroad Market Surveillance and Inspection Strengthening the Organization Abroad Projects with Future Prospects 68 April 2013 Ministry of Economy


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