Esteemed Stakeholders,
The global economy is undergoing a process of
re-balancing and re-pricing.
2013 was a year in which the global economic activities
recovered at a pace slower than expected; while, it was
observed that the remarkable decoupling between the
growth performances of the developed and the developing
countries began to disappear. While significant recoveries
were experienced in the U.S. and Japan economies, it has been
observed that economic activities in the Eurozone countries
began to improve compared to the previous years.
The most important incident of 2013 that guided the markets
was the statement of the Chairman of the U.S. Central Bank
(Fed) in May. Bernanke stated that the U.S. economy began to
perform relatively well and depending upon the improvements
in the unemployment rate, the Fed could limit the asset
purchases program.
As the expectations regarding Fed tapering became a current
issue, volatility in capital flows directed to the developing
countries increased starting from the second half of 2013. This
situation affected the economic activity in developing countries
negatively. Another outcome of the process was depreciation
of domestic currencies in the developing countries; and the
upward pressure it created on inflation.
The process of re-balancing and re-pricing that has been
observed in the global economy starting especially in the
second half of 2013 is predicted to continue in 2014 as well.
In this conjuncture, it is anticipated that the developed
countries will produce a relatively positive economic
performance whereas developing economies will grow
moderately when compared to the previous years.
In parallel with the steps taken by the Fed depending upon
the improvement of the economic activity in the U.S., the
course of the interest rates and the regulations will determine
the performance of the banking sector. However, for the
Euro Zone, it is anticipated that economic recovery will be
weaker compared to the U.S. and the banking sector will not
be reaching its desired performance in 2014 caused by the
significant decoupling of the economic activities in the Euro
Zone countries. It is also expected that banking sectors of the
developing countries will be affected by the steps taken by the
Fed and the volatility in international capital flows.
Growth in the Turkish economy has been supported by
consumption and investment expenditures.
When we analyze the development in Turkey following
the crisis, it can be seen that domestic consumption and
investment expenditures in 2010 and 2011 led to high
economic growth, however, in 2012 domestic consumption
and investment expenditures remained flat while there was
an increased contribution from net exports to growth. The
growth composition of Turkish economy started to change
compared to 2012 and it has been supported by consumption
and investment expenditures.
The low levels of “budget deficit to GDP” and “public debt
to GDP” ratios also distinguish Turkish economy positively.
In addition to these, strong capital structure of the banking
sector and advanced risk management applications in Turkey
are frequently emphasized and appreciated by international
corporations and investors.
For the first time in 21 years, Turkey was granted “investment
grade” rating from two credit rating agencies in 2013. On the
other hand, Turkey’s high current account deficit and need for
external-financing continue to be the important risk factors.
2014 will be a year which the business world should monitor
closely and our economy should be constructed upon its strong
base with utmost care.
In brief
The recovery in economic
activity remained short of
expectations.
Economies of developing
markets are expected to
exhibit a slower growth than
in previous years.
In 2013, the Turkish economy
grewwith the contribution of
growth in consumption and
investment expenditures.
Activities
11
İşbank
Annual Report 2013
