Turkey 2009 Webinar

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This is a presentation made by Rolf Danielsen, country analyst at the Swedish bank SEB. The presentation were held at a live webinar on the Benche. A recorded version of the webinar can be seen here: https://www.thebenche.com/forum/benche/6956-recorded-version-turkey-webinar.html

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Turkey 2009 Webinar

  1. 1. WEBinar Nov. 25, 2009 Rolf Danielsen Turkey – weathering the crisis
  2. 2. Crisis hit Turkey hard <ul><li>Years of strong growth cut short by crisis </li></ul><ul><li>Domestic demand fell over a cliff </li></ul><ul><li>Expectation shock </li></ul><ul><li>Consumption down 10% (Q1) </li></ul><ul><li>Investments down 27% </li></ul>
  3. 3. But the fall was cushioned <ul><li>Domestic stimulus package </li></ul><ul><ul><li>Reduced taxes, increased soc. sec. </li></ul></ul><ul><ul><li>Subsidies for new car purchases etc. </li></ul></ul><ul><ul><li>wage raise in public sector </li></ul></ul><ul><li>Lower interest rates </li></ul><ul><li>Softer exchange rate </li></ul>
  4. 4. Signs of recovery Leading indicator: Exports prospects New orders Employment situation
  5. 5. But not yet buoyant <ul><li>Fiscal stimulus to expire </li></ul><ul><li>General import softness </li></ul><ul><li>Balance of payments </li></ul><ul><ul><li>Profit tax on T-bills! </li></ul></ul><ul><ul><li>Rising oil price </li></ul></ul><ul><li>Higher interest rates </li></ul><ul><li>Higher fiscal deficit </li></ul>
  6. 6. Risk: Government budget <ul><li>deficit sharply up -09 </li></ul><ul><li>MEP in Sept. 2009 </li></ul><ul><li>based on robust recovery forecast </li></ul><ul><li>interest sensitive </li></ul><ul><li>explosive public health costs </li></ul>
  7. 7. Upside: stronger banks <ul><li>Weathered the crisis better than expected </li></ul><ul><li>No major bank-run: continued deposits growth </li></ul><ul><li>Credit expansion paused but picking up recently </li></ul><ul><li>Bad loans rising but still below 6% </li></ul><ul><li>Less crisis prone </li></ul>
  8. 8. Political issues <ul><li>Traditionally high event risk </li></ul><ul><li>Battle between secularists and traditionalists </li></ul><ul><li>EU membership </li></ul><ul><li>Regional opportunities/challenges </li></ul><ul><ul><li>Kurds </li></ul></ul><ul><ul><li>Iraq/Iran </li></ul></ul><ul><ul><li>Armenia </li></ul></ul><ul><ul><li>Nabucco and gas hub </li></ul></ul>Where is Turkey heading – East or West?

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