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Outlook for Turkish Economy, GS Investors, 27.09.2013

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  • 1. Outlook for Turkish Economy London September 27, 2013 Mehmet Şimşek Minister of Finance
  • 2. Outline Short‐Term Economic Outlook Reform Agenda Turkey’s Long‐Term Prospects 2
  • 3. Short‐Term Economic Outlook 3
  • 4. 100.0 118.4 85 90 95 100 105 110 115 120 2007‐Q1 Q2 Q3 Q4 2008‐Q1 Q2 Q3 Q4 2009‐Q1 Q2 Q3 Q4 2010‐Q1 Q2 Q3 Q4 2011‐Q1 Q2 Q3 Q4 2012‐Q1 Q2 Q3 Q4 2013‐Q1 Q2 RealGDP (2007 Q4=100, s.a.) Source: Turkstat Moderate Economic Growth 4
  • 5. 5 Employment  since end‐2007  (MnPeople, s.a.) Source:TURKSTAT 25.6 20 21 22 23 24 25 26 2008‐1 2009‐1 2010‐1 2011‐1 2012‐1 2013‐1 Employment
  • 6. Real Economic Activity Indicators Source: CBRT, TURKSTAT 6 ‐25 ‐20 ‐15 ‐10 ‐5 0 5 10 15 20 25 2008‐1 3 5 7 9 11 2009‐1 3 5 7 9 11 2010‐1 3 5 7 9 11 2011‐1 3 5 7 9 11 2012‐1 3 5 7 9 11 2013‐1 3 5 7 9 Industrial Production Index*(c.a.) Capacity Utilization** Manufacturing Index(c.a.)* * Annual percent change ** Annual difference
  • 7. PMI Source: HSBC 7 50.9 30 35 40 45 50 55 60 2007‐1 3 5 7 9 11 2008‐1 3 5 7 9 11 2009‐1 3 5 7 9 11 2010‐1 3 5 7 9 11 2011‐1 3 5 7 9 11 2012‐1 3 5 7 9 11 2013‐1 3 5 7 Above 50 last ten months
  • 8. Confidence Indices Source: CBRT, TURKSTAT 8 50 55 60 65 70 75 80 85 90 50 60 70 80 90 100 110 120 130 2007‐1 3 5 7 9 11 2008‐1 3 5 7 9 11 2009‐1 3 5 7 9 11 2010‐1 3 5 7 9 11 2011‐1 3 5 7 9 11 2012‐1 3 5 7 9 11 2013‐1 3 5 7 9 Real Sector Confidence Index (Left) Consumer Confidence Index (Right)
  • 9. Downside risks to Growth Tighter monetary and financial conditions Weaker external demand (fragile Eurozone recovery) Geopolitical Tensions Higher international energy prices 9
  • 10. ( %) 10 Monetary Policy is tightening Source: CBRT 3.5 7.75 4.5 3 5 7 9 11 13 15 2011‐10 11 12 2012‐1 2 3 3 5 5 6 7 8 10 11 12 2013‐1 2013‐1 3 4 5 5 7 7 9 CBRT Funding Rate O/N Borrowing O/N Lending Policy Rate
  • 11. 8 10 12 14 16 18 20 22 24 26 28 1/4/2008 4/4/2008 7/4/2008 10/4/2008 1/4/2009 4/4/2009 7/4/2009 10/4/2009 1/4/2010 4/4/2010 7/4/2010 10/4/2010 1/4/2011 4/4/2011 7/4/2011 10/4/2011 1/4/2012 4/4/2012 7/4/2012 10/4/2012 1/4/2013 4/4/2013 7/4/2013 Personal Vehicle Housing Commercial ( %) 11 Source: CBRT Lending Rates are rising
  • 12. 12 * Credit Growth is adjusted for exchange rate movements Source: CBRT Credit Growth is slowing13 week moving avg., y‐on‐y % 31.0 0 5 10 15 20 25 30 35 40 45 2011‐1 2 3 3 4 5 6 7 8 9 10 11 12 2012‐1 2 3 3 4 5 6 7 8 9 10 11 12 2013‐1 2 3 3 4 5 6 7 8
  • 13. Inflation 107.2 125.5 99.1 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 Source: CBRT 13
  • 14. Risks to Inflation Weaker  Exchange  rate Higher  commodity  prices Upside Widening  output gap Downside 14
  • 15. Fiscal  10.8 7.9 4.1 0.1 ‐1.3 0.2 1.6 5.5 3.0 0.4 1.0 1.4 1.2 0.9 ‐2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 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 Budget Deficit‐to‐GDP, % 15
  • 16. Current Account Deficit:  A Soft Spot 16
  • 17. High but Manageable CAD (12 Month Rolling, USD bn) Source: CBRT 17 ‐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 7 Current Account Current Account without Energy Import Current Account + Net FDI + Net Errors and Omissions
  • 18. Gold Effect(12 Month Rolling, USD bn) Source: CBRT 18 ‐80.0 ‐70.0 ‐60.0 ‐50.0 ‐40.0 ‐30.0 ‐20.0 ‐10.0 0.0 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 7 Current Account excl Gold Current Account Net Gold Exports • 2011:  ‐$4.8 billion • 2012:  +$5.7 billion • 2013 Jan‐Jul:  ‐$8.4 billion
  • 19. Financing of Current Account Deficit (12 Month Rolling, USD bn) Source: CBRT 19 ‐10 0 10 20 30 40 50 60 70 80 90 2007‐1 3 5 7 9 11 2008‐1 3 5 7 9 11 2009‐1 3 5 7 9 11 2010‐1 3 5 7 9 11 2011‐1 3 5 7 9 11 2012‐1 3 5 7 9 11 2013‐1 3 5 7 FDI Inflows and Long‐Term Portfolio and Short‐Term Current Account Deficit
  • 20. Low Deficit Low & Declining Public  Debt Healthy Banking  System Low Household  Leverage Moderate Corporate  Leverage Diversified Export  Markets A Flexible Exchange  Rate & Reserve Management Policies Sound Macroeconomic Fundamentals
  • 21. 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 21
  • 22. Europe 56.6% Other 43.4% 2002 Exports to Europe are on the Fall Europe 38.8% Other 61.2% 2012 Source: TURKSTAT 22
  • 23. Source: TURKSTAT But, Exports to MENA are on the RiseExports toMENA (%of Total) 12.1 31.6 5 10 15 20 25 30 35 2002 2012 23
  • 24. 9 30 0 5 10 15 20 25 30 35 2002 2012 Number of Products over $1 billion Diversified Product Bundle Source: TURKSTAT 24
  • 25. 0 10 20 30 40 50 60 70 80 01/2006 04/2006 07/2006 10/2006 01/2007 04/2007 07/2007 10/2007 01/2008 04/2008 07/2008 10/2008 01/2009 04/2009 07/2009 10/2009 01/2010 04/2010 07/2010 10/2010 01/2011 04/2011 07/2011 10/2011 01/2012 04/2012 07/2012 10/2012 01/2013 04/2013 07/2013 A Flexible Exchange Rate 25 Source: Bloomberg  * Volatility is calculated using 30‐day moving average.  ** Emerging Markets  include Brazil, Chile, Colombia, Czech Republic, Hungary, Indonesia, Malaysia, Mexico, Philippines,  Poland, Romania, South Africa, Korea, and Turkey.  Volatility* Emerging Economies** Turkey
  • 26. Real Effective Exchange Rate Source: CBRT (2003=100) 26 80 90 100 110 120 130 140 150 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 7 CPI Based REER CPI (Developing Countries) Based REER CPI (Developed Countries) Based REER
  • 27. 74.0 67.7 59.6 52.7 46.5 39.9 40.0 46.1 42.3 39.1 36.2 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 27
  • 28. Healthy Banking System * Latest data, monthly Source: Banking Regulation and Supervision Agency 28 2002 2013‐7 17.6 2.8 NPL Ratioof Loans(%) Capital Adequacy Ratio, % 15.93 0 5 10 15 20 25 30 35 2003‐1 8 3 10 5 12 7 2 9 4 11 6 2010‐1 8 3 10 5 12 7 Target Rate 12%  Legal Rate 8% 
  • 29. Low Household Leverage Source: CBRT, ECB (Household Liabilities, % of GDP, 2012) 29 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
  • 30. Moderate Corporate Leverage 30 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 (Corporate liabilities, %, GDP) Source: CBRT, Cetinkaya, BRSA
  • 31. Reform Agenda 31
  • 32. Chapter ‐ 1 Moving Up  the Value  Chain Deepening  Capital Markets Combatting  the Shadow  Economy Improving  Infrastructure 32
  • 33. Moving Up the Value Chain 33
  • 34. Why is R&D so significant for us? The share of high and medium‐high technology sectors in production and in export is low Boosting R&D Source: Ministry of Development 27.6 72.4 35.6 64.4 0 10 20 30 40 50 60 70 80 High and Medium‐High Low and Medium‐Low Production Export 34
  • 35. Source: The Scientific and Technological Council of Turkey R&D Spending • 3.00%2023 • 0.86%2011 • 0.53%2002 35
  • 36. Industrial Design Applications 41,226 applications in 2012 Up by 103% since 2002 Source: TPI 36
  • 37. Trade Mark Applications Source: TPI • 109,767 2012 • 36,578 2002 37
  • 38. Patent  Applications Source: TPI 1,874 11,555 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 2002 2012 38
  • 39. Deepening Capital Markets 39
  • 40. 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 40
  • 41. Restructuring of Borsa Istanbul Regional  Leadership Raising  Market  Cap/GDP to 80% 1,000 new  companies to be listed 41
  • 42. Istanbul as a Financial Center Financial sector currently employs 200 thousand people Istanbul Finance Center is likely to add 150 thousand 42
  • 43. Increasing Savings: Private Pensions 25% State Contribution Penalty for Early  Withdrawals 43
  • 44. Incentives for Global Fund Managers A tax free environment for  Global Funds Making it easier to manage assets  in Turkey 44
  • 45. 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 45
  • 46. Incentives for Business Angels 46
  • 47. Sukuk 47 Similar to eurobonds, internat’l holders aren’t subject to w/holding tax Sep‐12: 1st Sukuk issued for $1.5bn in international market  Oct‐12: 2nd Sukuk denominated in TL issued for TL1.6bn Feb‐13: 3rd Sukuk issued for TL1.5bn Aug‐13: 4th Sukuk issued for TL1.8bn
  • 48. Combatting the Shadow Economy 48
  • 49. Informal Employment 52.1 51.7 50.1 48.2 47.0 45.4 43.5 43.8 43.3 42.1 39.0 37.8 35 37 39 41 43 45 47 49 51 53 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 June Source:TURKSTAT (%, Total Employment) 49
  • 50. Size of Shadow Economy (%, GDP) 32.2 31.5 30.7 30.4 29.1 28.4 28.9 28.3 27.7 27.2 26.5 26 27 28 29 30 31 32 33 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Schneider, 2013 Down 6 percentage points 50
  • 51. Size of Shadow Economy (%, GDP) 31.2 28.4 28.4 28.0 27.6 26.5 25.5 25.2 24.3 23.8 23.6 23.1 22.1 21.1 19 18.6 18.5 16.4 15.5 15 13.9 13.6 13 13 13 12.2 9.9 9.7 9.1 8 7.6 7.1 5 10 15 20 25 30 35 Bulgaria Romania Crotia Lithuania Estonia TURKEY Latvia S.Cyprus Malta Poland Greece Slovenia Hungary Italy Portugal Spain Average Belgium Czech Rep. Slovak Rep. Sweeden Norway Denmark Finland Germany Ireland France UK Netherland Luxemburg Austria Switzerland Source: Schneider, 2013 But still higher than EU average 51
  • 52. Tax Loss (% GDP) 7.8 7.3 7.4 7.5 7.5 7.1 6.8 6.3 5.7 5.3 5.3 5.7 3.6 3.4 3.4 3.4 3.5 3.4 3.3 3.1 2.9 2.6 2.5 2.8 2 3 4 5 6 7 8 9 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Turkey Sample Average 3ppt higher than the EU average Source: Schneider, 2012 52
  • 53. Keep fighting informal economy Action Plan for Fighting  Informality  2011‐13 Strengthening Capacity of  Revenue Administration &       Tax Audit Board Income Tax Reform and Tax  Procedural Law 53
  • 54. Improving Infrastructure 54
  • 55. 1,714 Km Total of Motorways 4,387 Km Total of State and  Provincial Dual  Carriageways  Total: 6,101 Km Dual Carriageway  Network (January 1, 2003) 2,244 Km Total of Motorways 20,152 Km Total of State and  Provincial Dual  Carriageways Total: 22,396 Km Dual Carriageway  Network (July 1, 2013) 55
  • 56. Under Construction Completed High Speed Railway Projects 56Source: Ministry of Transport   İSTANBUL ESKİŞEHİR POLATLI ANKARA KONYA SİVAS 212 km 533 km 405 km YOZGAT Yerköy AFYON İZMİR MANİSA 624 km BURSA BİLECİK 105 km
  • 57. • The number of airports serving scheduled flights = 262003 • The number of airports serving  scheduled flights = 522013 Airports Available For Civil Aviation Traffic in  Turkey Airports serving Scheduled  Flights (52) Airports under Construction (3) Airports Planned (1) 57
  • 58. Chapter ‐ 2 Enhancing  Human Capital  Stock Improving  Labor Market  Flexibility Reducing  Energy Import  Bill Reconciliation  Process 58
  • 59. Enhancing Human Capital Stock 59
  • 60. Students (%, Total Population) 60 39 22 15 20 25 30 35 40 45 Turkey EU Source: TURKSTAT, Eurostat
  • 61. 21 0 10 20 30 40 50 60 70 80 90 Germany France United Kingdom Italy Spain Poland Romania Turkey Netherlands Greece Belgium Portugal Czech Republic Hungary Sweden Austria Switzerland Bulgaria Denmark Slovakia Finland Norway Ireland Croatia Lithuania Macedonia Slovenia Latvia Estonia Cyprus Montenegro Luxembourg Malta Iceland Liechtenstein Turkey’s Student Population 61Source: Ministry of Development, Eurostat Population, million
  • 62. 9.4 17 8 10 12 14 16 18 2002 2013 Source: Ministry of Finance Share of Education Budget% 62
  • 63. Investment in Education Over the last  decade, we have • Built 188,459  classrooms • Hired 395,144 teachers 63 Source: Ministry of Education
  • 64. Gross Schooling Rates Source: Ministry of Development 11.2 96.5 80.8 35.8 44.0 107.6 96.8 81.6 10 30 50 70 90 110 130 Preschool (age of 4‐5 ) Primary School Secondary School Higher Education 2002‐2003 2012‐2013 64
  • 65. Source: OECD, PISA 2009 PISA Results ‐ Mathematics 43rd (among 65 countries) 65 445 350 375 400 425 450 475 500 525 550
  • 66. Source: OECD, PISA 2009 PISA Results ‐ Science 43rd (among 65 countries) 66 454 350 370 390 410 430 450 470 490 510 530 550 Korea Estonia Germany Liechtenstein Slovenia Poland Hungary France İtaly Croatia Russia Greece Turkey Bulgaria Mexico Brazil Argentina Indonesia
  • 67. Improving Quality of Education With Fatih Project, we are providing our children with Broadband Internet Access Smart Boards Tablet PCs Other Information Technology Tools 67
  • 68. Source: OECD Fatih to help FURTHER reduce the Gap between Turkey & OECD (PISA Results) 68 30 40 50 60 70 80 science math 2006 2009
  • 69. Improving Labor Market Flexibility 69
  • 70. Low Employment Rate Early retirement Low rate of female labor  force participation Rigidities in labor force  market  70
  • 71. Average Retirement Age 41.0 44.9 61.9 63.3 30 35 40 45 50 55 60 65 Female Male Turkey OECD Source: OECD 71
  • 72. Labor Participation Rate, Female OECD Average: 62.3 Source: TURKSTAT, OECD 72 Labor Participation Rate by Education (2013  June) 31.9 18.8 27.8 32.6 41.5 71.6 10 20 30 40 50 60 70 80 Total Illeterate Less than high school High school Vocational high school Higher education
  • 73. Improving Girls’ Education 2002 91.1 girls per  100 boys 2012 101.8 girls  per 100 boys 73
  • 74. Source: OECD Highest among OECD countries Average Usual Weekly Hours Worked on the Main Job 48.9 30 32 34 36 38 40 42 44 46 48 50 Turkey Korea Mexico Greece Czech Republic Israel Slovak Republic Poland Iceland Slovenia Hungary Portugal Chile Canada Estonia Spain France Austria Italy New Zealand Finland Luxembourg Belgium Sweden United Kingdom Australia Germany Switzerland Ireland Norway Denmark Netherlands Highest among OECD countries 74
  • 75. Reducing Energy Import Bill 75
  • 76. Source: TURKSTAT, Bloomberg Energy Import Bill (Brent, $ pbl) Energy Imports (Billion Dollars) 76 9.2 60.1 57.9 0 20 40 60 80 100 120 0 10 20 30 40 50 60 70 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013July Energy Import Oil Prices
  • 77. High Dependence on Energy Imports 72% Total Energy 92% Oil 98% Natural‐Gas 77
  • 78. Developing Local & Renewable Resources Source: Ministry of Energy and Natural Resources Electricity Generation Installed Capacity MW % of Total Current Installed Capacity (Sept, 2012) 55,663 ‐ Renewable Energy 20,963 37.7 Power Plants Under Construction 23,396 ‐ Renewable Energy 15,879 67.9 TOTAL 79,029 ‐ Renewable Energy 36,843 46.6 78
  • 79. Building the Nuclear Capacity Akkuyu:  JW with Russia Sinop JW with a Japanese‐French consortium Working on a 3rd plant 79
  • 80. Improving Energy Efficiency Industry  20% Transportation  15% Construction  30% 80
  • 81. Privatization • Distributions: Done Hamitabat Termal Power Plant Seyitömer Termal Power Plant Kangal Termal Power Plant • Generation: 16,530MW on sale 81
  • 82. Reconciliation Process 82
  • 83. Lost Decades About 40,000 deaths About $350 billion spent on fighting  terrorism Indirect cost is more than $1 trillion 83
  • 84. Turkey’s Strong Long‐Term Prospects 84
  • 85. GDP Source: TURKSTAT, Medium‐Term Program,PwC 2002 2050 2002 $ 230  billion 2050 $ 5 trillion 2012 $ 786 billion 2023 $ 2 trillion 85
  • 86. GDP per Capita Source: TURKSTAT, Medium‐Term Program,PwC 2002 2050 2002 $ 3,492 2012 $10,497 2023  $ 25,000 2050 $ 50,000 86
  • 87. Ambitious Targets Source: IMF, PricewaterhouseCoopers 1. USA 2. China 3. India 4. Japan 5. Germany 6. Russia 8. UK 7. Brazil 9. France 10. Italy 11. Mexico 12. South Korea 13. Canada 14. Spain 15. Indonesia 16. TURKEY 17. Iran 18. Australia 19. Saudi Arabia 20. Taiwan 2012 (GDP‐PPP) Target Top 10 in the World Top 3 in Europe 6th in Europe 16th in the World 87
  • 88. Average Real GDP Growth Rates 88 Source: Turkstat, Ministry of Development 4.5 3.1 5.1 5.5 2 3 4 5 6 1924‐2002 1993‐2002 2003‐2012 2014‐2018 % Reforms to increase potential growth
  • 89. Determinants of Long‐Term Growth Quality of Institutions Demographics Productivity 89
  • 90. Improving Quality of Institutions 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 90
  • 91. 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 91
  • 92. 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 92
  • 93. 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) 93
  • 94. (44th among 148 countries) Source: World Economic Forum Global Competitiveness Index (2013) 29 38 42 44 49 51 55 56 60 63 64 76 78 84 91 25 35 45 55 65 75 85 95 China Indonesia Poland TURKEY Italy Portugal Mexico Brazil India Hungary Russia Romania Slovak Rep. Ukraine Greece 94
  • 95. (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 95
  • 96. (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 96
  • 97. Favorable Demographics Source: Eurostat Share of 15‐24 years old in Total Pop. (%) 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 Turkey Moldova Azerbaijan 97
  • 98. 2.0 1.0 0.3 0.7 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 Turkey USA EU‐27 OECD Annual Average Population Growth Rate  (%, 2001‐11)Growth Rate of Working‐Age Population Source: OECD, Eurostat, TURKSTAT 98
  • 99. Have Investors Noticed the  Transformation? 99
  • 100. International Companies Operating in Turkey  (1000s) Source: Ministry of Economy 100 5.6 6.7 8.8 11.7 15.0 16.1 19.2 21.9 25.2 29.6 33.8 34.5 0 5 10 15 20 25 30 35 40 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jun
  • 101. Foreign Direct Investment Inflows Source: CBRT (Billion dollar) 14.8 122.8 0 20 40 60 80 100 120 140 1980‐2002 2003‐2012 101
  • 102. REER Appreciation Source: CBRT (2003=100) 102 55 65 75 85 95 105 115 125 135 1989‐1 7 1990‐1 7 1991‐1 7 1992‐1 7 1993‐1 7 1994‐1 7 1995‐1 7 1996‐1 7 1997‐1 7 1998‐1 7 1999‐1 7 2000‐1 7 2001‐1 7 2002‐1 7 2003‐1 7 2004‐1 7 2005‐1 7 2006‐1 7 2007‐1 7 2008‐1 7 2009‐1 7 2010‐1 7 2011‐1 7 2012‐1 7 2013‐1 7 Linear Trend
  • 103. THANK YOU… 103