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Fiscal Policy In Turkey
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Fiscal Policy In Turkey






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    Fiscal Policy In Turkey Fiscal Policy In Turkey Presentation Transcript

    • ERSTE GROUPFISCAL POLICY IN TURKEYMarch 22, 2012Mehmet ŞimşekMinister of Finance
    • Turkey: Strong Recovery, butModeratingSource: TURKSTAT94.8100.087.0110.5808590951001051101152007-Q1Q2Q3Q42008-Q1Q2Q3Q42009-Q1Q2Q3Q42010-Q1Q2Q3Q42011-Q1Q2Q3RealGDP(s.a,,2008Q1=100)
    • LoanGrowth*(13weekmovingavg.,y-on-y%)Turkey: Credit Growth is Slowing DownSource: Central Bank of Capital.* Adjusted for exhange movements.01020304050602011 2007-2011 ortalama 2012Jan.Feb.Mar.Apr.May.Jun.Jul.Aug.Sep.Oct.Nov.Dec.2007-2011 averagePointing to a Soft Landing
    • Turkey: Industrial ProductionOn a downward trendSource: TURKSTAT-25-20-15-10-505101520252007-13579112008-13579112009-13579112010-13579112011-13579112012-1IndustrialProduction(y-on-y,%)
    • Turkey: Current Account DeficitCurrentAccountBalance(12MonthRolling,USDmn)Source: Central Bank of Turkey-80.000-70.000-60.000-50.000-40.000-30.000-20.000-10.000010.00020.0002007-13579112008-13579112009-13579112010-13579112011-13579112012-1Current Account Non Energy Current Account
    • Turkey: REER still Supportive of AdjustmentSource: Central Bank of Turkey607080901001101201301402003-147102004-147102005-147102006-147102007-147102008-147102009-147102010-147102011-147102012-1CPI Based Real Effective Exchange Rate CPI - Developing Countries - Based Real Effective Exchange Rate(2003=100)
    • 4% Growth, still likely?
    • Despite Strong Credit Growth,Banks are well-capitalized Capital adequacy ratio is above the ratios of many emerging markets. This rate is almost twice the minimum legal limit of 8 %.90,8 % of legal equitycapital consists ofprinciple capitaldefined as equitycapital of goodquality.Legal limit: 8 percent051015202530352003-12004-12005-12006-12007-12008-12009-12010-12011-1Target rate: 12 percentCapitalAdequacyRatio(%)Source: BRSA
    • Strong Asset QualitySource: BRSA
    • Return on Equity20 % ROE since 2007
    • Job Creation is supportiveEmployment(ThousandPeople)Source: TURKSTAT19.00020.00021.00022.00023.00024.00025.0002007 201120,73824,110
    • UnemploymentRate,s.a.(December2007=100)80901001101201301401502007-12482008-12482009-12482010-12482011-12Source: Eurostat, TURKSTATEuro AreaTurkeyEU 27Unemployment at decade low
    • Turkey: Real Sector ConfidenceHolding up wellSource: Central Bank of Turkey50607080901001101201302007-13579112008-13579112009-13579112010-13579112011-13579112012-1RealSectorConfidenceIndex
    • Turkey: Composite Leading IndicatorSource: Central Bank of Turkey1301401501601701801902002007-13579112008-13579112009-13579112010-13579112011-13579112012-1CompositeLeadingIndicatorIndexPoints to a Soft Landing
    • JapanGreeceBelgiumUSAIndiaCanadaFranceEnglandBrazilArgentinaPolandMexicoTurkeySpainIrelandPortugalItalySlovakRepublic0246810120 50 100 150 200 250Keeping Debt and Deficit on a Downward TrendBudget Deficit and Debt Stock (2011)Source: IMF WEO Uptade Jan-12, IMF WEO Sep-11 and MTPBudgetDeficit/GDPDebt/GDP
    • AK Party means Business0123456789101994-2002 2003-20117.73.3Source: Ministry of FinanceBudgetDeficit(%GDP)Achieved fiscal targets except 2009
    • Lowering Debt-to-GDPSource: Treasury77.939.832.02030405060708020012002200320042005200620072008200920102011*2012*2013*2014*GeneralGovernmentDebtStock/GDP(%)Satisfying Maastricht Criteria since 2004
    • Zeroing Net Public Sector DebtSource: Treasury23.788.44.2-20020406080100200020012002200320042005200620072008200920102011-I2011-II2011-IIINetExternalPublicDebtStock(BillionTL)
    • Domestic Debt StockSource: Treasury1983 199231941992 2002194149.8702002 2011149.870368.7781983-19921992-20022002-2011MillionTLMillionTLMillionTL
    • Interest Payments to Tax RevenuesSource: Ministry of FinanceWe lowered interest bill since 1981InterestPayments/TaxRevenues(%)
    • But we areworking on itShort-term Medium-term Long-termCurrent Account is a Challenge
    • Short-Term
    • ReciprocityForeigners can invest in Turkey through theacquisition of real estate property
    • We must be doing something rightSource: TreasuryNumberofCompanieswithInternationalCapital(Cumulative,inThousands)5,66,78,811,71516,219,322,125,429,4 29,5051015202530352002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Jan
    • Foreign Direct Investment InflowsSource: Central Bank of TurkeyBilliondollar14,8109,40204060801001201980-2002 2003-2011
    • Medium-Term
    • New Incentive SchemeObjectives:- Reduce regional development gaps- Reduce current account deficit- Promote efficient allocation of resources to high value-added investmentsGeneralIncentiveSchemeRegionalIncentiveSchemeLarge ScaleProjectsStrategicInvestments
    • R&D and INNOVATION
    • Why is R&D so significant for us?The share of high and medium-hightechnology sectors in production and inexport is low.R&DSource: Ministry of Development27,672.435,664.401020304050607080High and Medium-High Low and Medium-LowProduction Export
    • •0.842010•0.532002The ratio of R&D expenses to GDP increased by 58 % in 9 years.Source: The Scientific and Technological Council of TurkeyRatio of R&D Expenses to GDP
    • R&D Expenses per Capita (PPP, $)In 2002, 46 $In 2010, 127 $2002-10, 176 % increaseSource: The Scientific and Technological Council of Turkey
    • Our Scientific PapersNumber ofscientific papersin 2002 was10,807It increased to28,194 in 2010.In 2002, we ranked22nd in the worldIn 2010, we ranked18th in the worldSource: The Scientific and Technological Council of Turkey
    • Source: Turkish Patent InstıtutePatent Application and Registration
    • Trademark Applications• 36,5782002• 117,4442011Source: Turkish Patent Instıtute
    • Türkiye,In 2011, under the 20 most reputable countries listprepared by Brand Office, Turkey increased its brand valueby 19.8 %to 373 billion dollars.High Brand Value
    • Industrial Design ApplicationsWith 36,578 applications in 2011, Turkey ranked among the top 3 in Europe, with Germanyand France.The rate of increase from 2002 to 2011 was 80 %.Source: TPI
    • ENERGY
    • Source: Ministry of Development, BloombergAverage Crude Oil Prices and Energy Imports(BrentType,Dollar/Barrel)EnergyImports(BillionDollars)02040608010012001020304050602002 2003 2004 2005 2006 2007 2008 2009 2010 2011Energy Import Oil Prices92354111
    • Investment in EnergyHydro Carbon 19,492 MWHydroelectric Power Plant 15,582 MWOther Renewables 4,958 MWUNDER CONSTRUCTION 40,035 MWCURRENT CAPACITY 53,360 MWTOTAL 93,595 MW
    • Source: European Wind Energy Association (EWEA)Wind Energy Capacity2002 2011Turkey used to rank 35th in wind energy capacity in Europe.In 2002, Turkey ranks 10th in Europe.35.10.
    • New incentives for deepening FinancialMarketsMeasures to extend the Maturity ofDepositsEnhancing the status of Istanbul as aRegional Financial Center
    • Long-Term
    • We againallocated thelargest shareto education inthe 2012budget.Resources Allocated to EducationSource: Ministry of FinanceEducation is our priority.BillionTL
    • Source: Ministry of Development of Republic of TurkeyIncreased access to EducationDuring our governing periods, we showed a marked improvement in the grossschooling rates.
    • Increasing the Quality of EducationWith Fatih Project, we are providing our childrenInternet AccessSmart BoardsTablet ComputersOther Information Technology Tools
    • 1,714 KmTotal of Motorways4,387 KmTotal of State andProvincial DualCarriagewaysTotal: 6,101 KmDual CarriagewayNetwork(January 1, 2003)2,236 KmTotal of Motorways18,991 KmTotal of State andProvincial DualCarriagewaysTotal: 21,227 KmDual CarriagewayNetwork(December 31,2011)Before 2003, only 6 cities were connected to each other via dual carriageway. Now, we have 74 cities21,227 Km3,125 Km3,061 Km27,413 KmDual carriageways put into serviceDual carriageways under constructionDual-carriageways to be put out to tenderTotal
    • Our RailwaysPRE-REPUBLIC RAILWAY NETWORK 4,136 km MAINLINEEARLY YEARS OF THE REPUBLIC (1923-1950) 3,764 km MAINLINE (134 km on annual average)1951-2002 945 km MAINLINE (18 km on annual average)2003 DEN GÜNÜMÜZE KADAR (2010 dahil) 1.076 km ANAHAT (Yılda Ortalama 135 km)UNDER CONSTRUCTION 1,987 km MAINLINE2003-2010 1,076 km MAINLINE (135 km on annual average)İSTANBULEDİRNEESKİŞEHİRPOLATLIANKARAKONYAİZMİRSİVASAFYONKAYSERİBURSA ERZİNCANERZURUMKARSMERSİNADANA GAZİANTEPDİYARBAKIRELAZIĞMALATYAZONGULDAKSAMSUNBANDIRMAVANTATVAN2010 : 11.940 km ( Konvansiyonel + Yüksek Hızlı )Adapazarı52Source: Ministry of Transport2010:11.940 km (Conventional+High Speed)
    • High Speed Railway Projects53İSTANBULESKİŞEHİR POLATLIANKARAKONYASİVAS212km533km405kmYOZGATHST Lines under Construction: ESK-İST and ANK-SİVASCompleted High Speed Train (HST) Lines: ANK-Eskişehir and ANK-KonyaYerköyHST at tender phase : Ankara-İzmir and Ankara-BursaAFYONİZMİRMANİSA 624kmBURSABİLECİK110 km
    • The Project of the CenturyGreat efficiency in travel time- Gebze to Halkalı under 105 minutes- Across the Bosphorus strait in 4 minutes.One way 75,000passanger/hour
    • Passenger Traffic at the AirportsPlane Traffic at the Airports55Source: General Directorate of State Airports Authority0200.000400.000600.000800.0001.000.0001.200.0001.400.0002003 2011154,218290,346218,405460,218156,582581,271529,2051,331,835Overflıght International Domestic Total020.000.00040.000.00060.000.00080.000.000100.000.000120.000.000Domestic International9,147,43958,329,26225,296,21659,018,31834,443,655117,347,580Domestic International Total
    • Downside RisksOil pricesEurozone debt crisisGeopolitical risks (Iran)
    • Corruption Perceptions IndexTURKEYSource: Transperancy Intenational
    • Corruption Perceptions Index Ranking (2002-2011)020406080100120140160TURKEYITALYBRAZILCHINAGREECEINDIAARGENTINAINDONESIAMEXICORUSSIA616973 758095 100 100 1001432011(among 183 countries)2002(among 102 countries)0102030405060708090100ITALYGREECEBRAZILMEXICOCHINATURKEYARGENTINAIDNIARUSSIAINDONESIA3144 455859 657073 7496Source: Transperancy Intenational
    • Ease of Doing Business Index (2006-2012)020406080100120ITALYMEXICOARGENTINARUSSIAGREECECHINATURKEYINDONESIAINDIABRAZIL707377 79 8091 93115 116 119020406080100120140MEXICOTURKEYITALYCHINAGREECEARGENTINARUSSIABRAZILINDONESIAINDIA537187911001131201261291322006(among 155 countries)2012(among 183 countries)Source: Doing Bussiness
    • Global Competitiveness Index (2005-2012)0102030405060708090CHINAITALYINDONESIABRAZILINDIAMEXICOTURKEYRUSSIAARGENTINAGREECE2643465356 5859668590Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.2005(among 125 countries)2012(among 142 countries)01020304050607080ITALYINDIAGREECECHINARUSSIAARGENTINABRAZILMEXICOINDONESIATURKEY384547485354 57596971Source: World Economic Forum