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Evca sempozyum v7   28.06.2013
 

Evca sempozyum v7 28.06.2013

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  • Wehavecarriedoutbankingsectorstresstests since 2004.In2006, weinitiatedthe12% objectivecapitaladequacyratioapplication (Basel II, 8%).In 2009, with the amendment made to Decision No. 32, we prevented the household to take currency risk by prohibiting foreign currency loans. We reduced the interest risk of the household.18 Haziran 2011(Resmi Gazete): Finansmanşirketleri Mart, Haziran, Eylül ve Aralıkdönemleriitibarıylakonut ve taşıtkredisidışındakitüketicikredileriiçinkreditutarınınyüzde 4’ü oranında, anapara, faizveya her ikisinintahsilinde 30 gündenfazlaancak 90 gündenazgecikmeolanbuniteliktekikredileriçinkreditutarınınyüzde 8’i oranındagenelkarşılıkayırırlar.”
  •  Turkey ranked 65th out of 102 countries in 2002 whereas it became 54th among 176 countries in 2012.
  • Turkey ranked 65th out of 102 countries in 2002 whereas it became 54th among 176 countries in 2012.
  • While Turkey ranked 71st out of 125 countries in the Global Competitiveness Index in 2005, it has become 43thamong 144 countries in the period of 2012-2013.
  • While Turkey ranked 71st out of 125 countries in the Global Competitiveness Index in 2005, it has become 43rdamong 144 countries in the period of 2012-2013. Turkey moved up by 16 places compared to the previous period. Turkey became 2nd fastest rising country in the most competitive economies list. 
  • While Turkey ranked 84th among 175 countries in 2006, it has become 71stamong 185 countries in 2012.  
  • While Turkey ranked 84th among 175 countries in 2006, it has become 71stamong 185 countries in 2012.  

Evca sempozyum v7   28.06.2013 Evca sempozyum v7 28.06.2013 Presentation Transcript

  • Turkey: Economic Outlook European Private Equity Venture Capital Association Symposium June 28, 2013 Mehmet Şimşek Minister of Finance
  • Outline A Strong Convergence Story Medium and Long-Term Prospects Political Outlook and Reconciliation Process 2
  • A Strong Convergence Story 3
  • Real GDP Source: TURKSTAT RealGDP(2002Q4=100,s.a.) 4 100 162 90 100 110 120 130 140 150 160 170 2002-Q1 Q3 2003-Q1 Q3 2004-Q1 Q3 2005-Q1 Q3 2006-Q1 Q3 2007-Q1 Q3 2008-Q1 Q3 2009-Q1 Q3 2010-Q1 Q3 2011-Q1 Q3 2012-Q1 Q3 2013-Q1
  • GDP Per Capita Source: TURKSTAT 5 1,099 1,573 800 1,000 1,200 1,400 1,600 2002 2012 Real, ¨ 3,492 10,504 3,000 5,000 7,000 9,000 11,000 2002 2012 Nominal, $ 8,667 17,375 6,000 9,000 12,000 15,000 18,000 2002 2012 PPP, $
  • Real Convergence Kaynak: IMF, TURKSTAT, Eurostat %ofGDPperCapita(PPP,$) 6 23.5 34.8 36.0 56.0 20 25 30 35 40 45 50 55 60 2002 2012 Turkey /USA Turkey /European Union
  • 10.3 10.5 10.8 10.6 10.2 10.3 11.0 14.0 11.9 9.8 9.2 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5 14.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Unemployment Lowest rate in a decade Source:TURKSTAT 7 UnemploymentRate(%)
  • 8 Employment Source:TURKSTAT Employmentsince2005 (mnpeoples.a.) 25.6 19 20 21 22 23 24 25 26 2005-1 2006-1 2007-1 2008-1 2009-1 2010-1 2011-1 2012-1 2013-1
  • Price Stability Source: TURKSTAT, Medium-Term Program 9 (CPIInflation,y/y,%) 107.2 125.5 99.1 6.2 5.3 5.0 5.0 0 20 40 60 80 100 120 140 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Forecast Lowest rate over the past 44 years
  • C/A Deficit is a Source of Vulnerability 10
  • Current Account Deficit is High (12MonthRolling,USDbn) Source: CBRT 11 -51 -80 -60 -40 -20 0 20 40 2002-1 4 7 10 2003-1 4 7 10 2004-1 4 7 10 2005-1 4 7 10 2006-1 4 7 10 2007-1 4 7 10 2008-1 4 7 10 2009-1 4 7 10 2010-1 4 7 10 2011-1 4 7 10 2012-1 4 7 10 2013-1 4 Current Account Current Account without Energy Import Current Account + Net FDI + Net Errors and Omissions
  • But we have… Diversified Export Base Flexible Exchange Rate Accumulated FX reserves Macro-prudential Framework Solid fiscal position Healthy banking sector Strong HH balance sheet & a dynamic real sector 12
  • 8 34 0 5 10 15 20 25 30 35 40 2002 2012 Diversified Export Markets Number of Export Markets over $1 billion Source: TURKSTAT 13
  • 9 30 0 5 10 15 20 25 30 35 2002 2012 Number of Products over $1 billion Diversified Product Bundle Source: TURKSTAT 14
  • Accumulated FX Reserves 15 (Bn$) Source: CBRT 127.5 60 65 70 75 80 85 90 95 100 105 110 115 120 125 130 135 6/21/2007 9/21/2007 12/21/20… 3/21/2008 6/21/2008 9/21/2008 12/21/20… 3/21/2009 6/21/2009 9/21/2009 12/21/20… 3/21/2010 6/21/2010 9/21/2010 12/21/20… 3/21/2011 6/21/2011 9/21/2011 12/21/20… 3/21/2012 6/21/2012 9/21/2012 12/21/20… 3/21/2013 6/21/2013 o.w. $19.9 bn gold
  • Started banking sector stress tests in 2004 Introduced 12% target CAR since 2006 Limits on dividend distribution since 2008 A ban on HH FX borrowing since 2009 An LTV ratio of 75% on mortgages since 2011 General provisions increased in consumer loans in 2011 Macro-Prudential Framework 18
  • 10.8 7.9 4.1 0.1 -1.3 0.2 1.6 5.5 3.0 0.4 1.0 1.5 1.2 0.9 -2 0 2 4 6 8 10 12 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Maastricht Criteria: 3% Medium-Term Program (2013-15) Achieved Maastricht Criteria except 2009 Source: Ministry of Development Gen.Gov’tBudgetDeficit-to-GDP,% 19 Strong Fiscal Position
  • 74.0 67.7 59.6 52.7 46.5 39.9 40.0 46.1 42.3 39.1 36.1 35.0 33.0 31.0 30 35 40 45 50 55 60 65 70 75 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Medium-Term Program (2013-15) Lower Public Debt Debt-to-GDP,% Satisfying Maastricht Criteria since 2004 Maastricht Criteria: 60% Source: Treasury 20
  • 21 Source: Treasury 26.2 31.3 30.0 31.3 27.6 26.2 25.3 29.9 28.1 21.6 20.3 35.4 23.9 19.1 10.4 6.5 3.3 2.9 2.7 0.9 0.7 -3.3 61.5 55.2 49.1 41.7 34.0 29.5 28.2 32.5 28.9 22.4 17.0 -10 0 10 20 30 40 50 60 70 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net TL Net FX Total Net PublicSectorNetDebt(%,GDP) Public Sector Net Debt
  • 88.4 -44.4 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 90 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Creditor in International Markets 22 Source: Treasury NetPublicExternalDebt(BillionTL)
  • Well-Capitalized Banking SectorCapitalAdequacyRatio,% Target Rate 12% Legal Rate 8% Source: BRSA 23 Capital adequacy ratio twice the minimum legal limit of 8%. 17.3 0 5 10 15 20 25 30 35 2003-1 5 9 2004-1 5 9 2005-1 5 9 2006-1 5 9 2007-1 5 9 2008-1 5 9 2009-1 5 9 2010-1 5 9 2011-1 5 9 2012-1 5 9 2013-1
  • Low Household Leverage Source: CBRT, ECB (HouseholdLiabilities,%ofGDP,2012) 24 65.5 21.2 0 20 40 60 80 100 120 140 160 Denmark Netherlands Ireland United Kingdom Portugal Sweden Spain Euro area Finland Greece Malta Germany France Belgium Luxembourg Austria Italy Estonia Poland Latvia Czech Republic Hungary Slovenia Slovakia Lithuania TURKEY Turkish HHs do not have FX exposure
  • Moderate Corporate Leverage 25 39.2 34.1 0 20 40 60 80 100 120 Luxembourg Spain Portugal Netherlands Ireland Denmark Italy Slovenia Austria Sweden Greece France TURKEY Latvia Estonia Germany Finland Average Belgium United Kingdom Hungary Lithuania Slovakia Czech Republic Poland (Corporateliabilities,%,GDP) Source: CBRT, Cetinkaya, March 2013, BRSA
  • Role of Financial Sector in Growth 26
  • Banking Sector: Growing Assets Source: BRSA, Development Plan SizeofAssets/GDP(%) 61 93 101 125 50 60 70 80 90 100 110 120 130 2002 2012 2013 2018 27
  • Banking Sector: Highly Profitable 29 2003-12 average ROE is 18.5% 2007-12 average ROE is 19.6%
  • 30 Deepening Capital Markets
  • A New Capital Markets Law •Increasing financial deepening & innovation •Strengthening investor rights •Improving corporate governance New legal framework in line with the best global practices 31
  • Strengthening the legal framework Improving physical infrastructure Simplifying tax system Providing financial education The Project: Istanbul as a Financial Center 32 Main Objective: Deepening Financial Markets
  • Source: Borsa İstanbul, Capital Market Boards of Turkey, Development Plan 288 395 431 606 1000 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000 2002 2012 2013 2018 2023 NumberofListedCompaniesinBorsaIstanbul 15 39 41 66 80 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 2002 2012 2013 2018 2023 MarketCapitalization/GDP(%) Restructuring of Borsa İstanbul 33
  • Incentives for Global Fund Managers A tax free environment for Global Funds Making it easier to manage assets in Turkey 34
  • Incentives for Venture Capital Allowing contributions to Venture Capital to be deducted from Corporate & Personal Income Tax Base, up to • 10% of VC Revenues • 20% of VC Capital Tax Relief on Dividends 35
  • Incentives for Business Angels 36
  • Medium and Long-Term Prospects 37
  • GDP Source: TURKSTAT, MTP, PwC 2002 2050 2002 $ 230 billion 2050 $ 5 trillion 2012 $ 786 billion 2023 $ 2 trillion 38
  • GDP per Capita Source: TURKSTAT, MTP,PwC 2002 2050 2002 $ 3,492 2012 $10,504 2023 $ 25,000 2050 $ 50,000 39
  • Unemployment 10.3 9.2 8.9 7.2 5.0 4 5 6 7 8 9 10 11 2002 2012 2013 2018 2023 Source: TURKSTAT, MTP, Development Plan UnemploymentRate(%) 0.9 pts 1.2 pts 2.2 pts 40
  • Exports 41 (Bn$) Kaynak: TURKSTAT, MTP, Development Plan 36 152 158 277 500 0 100 200 300 400 500 600 2002 2012 2013 2018 2023
  • Fiscal DeficitGen.Gov’tBudgetDeficit-to-GDP,% Source: Ministry of Development, MTP, Development Plan 10.8 1.0 1.5 0.5 0 2 4 6 8 10 12 2002 2012 2013 2018 10 ppts 1 ppt 42
  • Determinants of Long-Term Growth Quality of Institutions Demographics Productivity 43
  • Improving Quality of Institutions 44 Doing Business Corruption Perception Index Global Competitiveness Index Human Development Index OECD-FDI Regulatory Restrictiveness Index Past Present 2023 Source: WB, WEF, Transparency International, OECD
  • Corruption Perceptions Index (2002) (65th among 102 countries) 31 44 45 58 59 65 70 73 74 96 20 30 40 50 60 70 80 90 100 Italy Greece Brazil Mexico China TURKEY Argentina India Russia Indonesia Source: Transparency International 45
  • Corruption Perceptions Index (2012) (54th among 176 countries) Source: Transparency International 54 69 72 80 94 94 102 105 118 133 40 50 60 70 80 90 100 110 120 130 140 TURKEY Brazil Italy China Greece India Argentine Mexico Indonesia Russia 46
  • Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.(71st among 117 countries) 38 45 47 48 53 54 57 59 69 71 30 35 40 45 50 55 60 65 70 75 Italy India Greece China Russia Argentina Brazil Mexico Indonesia TURKEY Source: World Economic Forum Global Competitiveness Index (2005) 47
  • (43rd among 144 countries) Source: World Economic Forum Global Competitiveness Index (2012) 29 41 42 43 48 49 50 53 59 60 67 71 73 78 94 20 30 40 50 60 70 80 90 100 China Poland Italy TURKEY Brazil Portugal Indonesia Mexico India Hungary Russia Slovak Republic Ukraine Romania Argentina Moved up 16 places in a year 2nd fastest rising country 48
  • (84th among 175 countries) Source: World Bank Ease of Doing Business (2006) 62 69 70 71 84 93 97 108 111 122 131 138 60 70 80 90 100 110 120 130 140 Mexico Italy Uruguay Romania TURKEY Argentina Russia China Greece Brazil Indonesia India 49
  • (71st among 185 countries) Source: World Bank Ease of Doing Business (2012) 48 71 72 73 78 84 89 91 112 124 128 130 132 137 20 40 60 80 100 120 140 Mexico TURKEY Romania Italy Greece Crotia Uruguay China Russia Argentina Indonesia Brazil India Ukraine 50
  • Favorable Demographics Source: Eurostat Shareof15-24yearsoldinTotalPop.(%) 16.8 7 9 11 13 15 17 19 21 Andorra Italy Greece Spain Portugal Germany Slovenia Ireland Bulgaria Luxembourg Switzerland Croatia Czech Republic Austria Liechtenstein Serbia Hungary Netherlands Finland France Denmark United Kingdom Norway Sweden Estonia Ukraine Malta Poland Latvia Slovakia Montenegro Lithuania Iceland Macedonia Georgia China TURKEY Moldova Azerbaijan 51
  • AnnualAveragePopulationGrowthRate (%,2001-11)Growth Rate of Working-Age Population Source: OECD, Eurostat, TURKSTAT, UN 52 2.0 1.0 1.0 0.7 0.3 0 0.5 1 1.5 2 TURKEY China USA OECD EU 27
  • Productivity: Priorities & Reform Agenda Enhancing Competition Deepening Capital Markets Education Improving Labor Market Flexibility Local & Renewable Energy Infrastructure Combatting Shadow Economy Moving up the Value-Chain Narrowing Regional Development Gaps 53
  • A Brief Review of Recent Political Unrest Political Fallout? Economic Fallout? 54
  • Reconciliation Process 55
  • THANK YOU… 56