Turkey economic report oct2012 (TheCityUK)

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Turkey economic report oct2012 (TheCityUK)

  1. 1. Turkey economic reportOctober 2012Regional commentary Upcoming events:Seasonally adjusted GDP rose by 1.8% on the quarter in Q2, the fastest pace of Turkeyexpansion since early 2011. However, this strength was entirely driven by surgingexports (boosted by extraordinary sales to Iran) while both consumer spending and 8 November 2012investment actually fell on the quarter. Development and opportunities inThe combination of faltering domestic demand, the weakness of the global economy the Turkish marketand the expectation that inflation would fall significantly during H2 has prompted the This seminar organised by White & Casecentral bank to loosen monetary conditions significantly over the last few months. This will cover current hot topics impactingeasing, together with a still fairly healthy labour market, may lead to a modest upturn the Turkish market. It will include an overview of the key changes to thein consumer spending and offer some support to investment. But at the same time, Turkish Commercial Code and the newgrowth in exports is set to moderate. Overall, GDP is expected to rise modestly in H2 capital markets law and its impact onbut more significantly through 2013 as global trade starts to pick up again, resulting in initial public offerings, project financinggrowth of 2.7% in 2012 as a whole and 4.2% next year. opportunities in the infrastructure industry and managing risk issues.But there remain serious threats to these reassuring forecasts. First, if the Eurozonewere to break up, Turkey would be hit very hard by the resulting financial turmoil. 7 December 2012Second, inflation could be more ‘sticky’ than the central bank assumes, which might Turkey Market Advisory Groupundermine policy credibility and push the exchange rate lower, adding to inflationary meetingpressure and the likelihood of a policy reversal. In addition, the rapid growth of bank Members of the Group are invited tocredit over the last five years may be a source of instability in the future. the next meeting. Find out more at www.thecityuk.comOn TheCityUK members’ websiteMembers can log-in at www.thecityuk.com to access our latestdocumentation, including:Government Response to the House of Commons Foreign Affairs CommitteeReport of Session 2010-12This note sets out the Government’s Response to the House of Commons Foreign AffairsCommittee Report of Session 2010-12, initiated by TheCityUK.TheCityUK’s evidence to the Foreign Affairs Committee - ‘UK-Turkey relations andTurkey’s regional role’This note sets out views on behalf of TheCityUK in the form of evidence submitted to theForeign Affairs Committee concerning UK-Turkey relations and Turkey’s regional role.ContactTo find out more about the opportunities to engage with the Turkey Group please contact:Senior Manager: Relationship Director: In association with:Jim Begbie Richard AdlerT: 020 7776 8994 T: 020 7776 8978M: 07764 170056 M: 07799 746810E: jim.begbie@thecityuk.com E: richard.adler@thecityuk.comVisit www.thecityuk.com for more information on TheCityUK and all of our Working Groups.
  2. 2. Turkey data October 2012Turkey: GDP and industrial production Turkey: Balance of payments% year US$ 30 5,000 Forecast GDP Fcast 0 20 -5,000 10 Current account -10,000 balance 0 -15,000-10 Visible trade -20,000 balance-20 Industrial -25,000 production-30 -30,000 2000 2002 2004 2006 2008 2010 2012 2014 2000 2002 2004 2006 2008 2010 2012 2014 Source : Oxford Economics/Haver Analytics Source : Oxford Economics/Haver AnalyticsTurkey: Interest rates Turkey: Stockmarket % Jan-86=1100 180 3 month interbank rate 80,000 90 Forecast 160 (RHS) 80 70,000 10 year government 140 70 bond (LHS) 60,000 120 60 Consumer 50,000 borrowing rate (LHS) 100 50 Coroporate 80 40,000 40 borrowing rate (LHS) 60 30,000 30 40 20,000 20 10 20 10,000 0 0 0 2000 2002 2004 2006 2008 2010 2012 2014 2000 2002 2004 2006 2008 2010 2012 Source : Oxford Economics/Haver Analytics Source : Oxford Economics/Haver Analytics Forecast for Turkey (annual percentage changes unless specified) 2009 2010 2011 2012 2013 2014Domestic Demand -7.4 13.5 9.6 -0.5 5.1 6.0 Private Consumption -2.3 6.7 7.8 -0.1 4.5 5.6 Fixed Investment -19.0 30.5 18.5 -2.0 3.9 8.5 Stockbuilding (% of GDP) -2.2 0.3 0.0 -0.5 0.3 0.0 Government Consumption 7.8 2.0 4.5 5.9 4.2 5.1Exports of Goods and Services -5.0 3.4 6.4 12.7 5.3 10.3Imports of Goods and Services -14.3 20.7 10.9 -0.6 8.3 11.7GDP -4.8 9.2 8.5 2.7 4.2 5.5Industrial Production -9.9 13.1 8.9 2.5 5.5 7.5Consumer Prices 6.3 8.6 6.5 8.9 5.9 5.4Government Budget (% of GDP) -5.5 -3.7 -1.4 -2.1 -1.7 -0.9Trade Balance ($bn) -24.9 -56.4 -89.1 -73.6 -78.3 -85.5Current Account ($bn) -13.4 -46.6 -77.1 -58.8 -60.2 -63.5Current Balance (% of GDP) -2.2 -6.4 -9.9 -7.4 -7.1 -7.2Short-Term Interest Rates (%) 8.8 7.0 8.4 7.9 7.2 8.9Exchange Rate (Per US$) 1.55 1.50 1.67 1.79 1.85 1.97Source: Oxford EconomicsThis report is based upon material in TheCityUK’s possession or supplied to us from reputable sources, which we believe to be reliable. Whilst every effort has been made to ensure itsaccuracy, we cannot offer any guarantee that factual errors may not have occurred. Neither TheCityUK nor any officer or employee thereof accepts any liability or responsibility for anydirect or indirect damage, consequential or other loss suffered by reason of inaccuracy or incorrectness. This publication is provided to you for information purposes and is not intendedas an offer or solicitation for the purchase or sale of any financial instrument, or as the provision of financial advice.Copyright protection exists in this publication and it may not be produced or published in any other format by any person, for any purpose without the prior permission of the originaldata owner /publisher and / or TheCityUK.  © Copyright October 2012www.thecityuk.com

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