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İŞBANK
ANNUAL REPORT 2014
14
THE GLOBAL
ECONOMY
The global economic recovery
remained below expectations
in 2014.
In 2014, global economic activity showed
an outlook that differed between countries
rather than being spread evenly as a
general, overall recovery. During this period,
the U.S. economy was separated from
the other developed countries with high
growth rates. While economic activities in
the Eurozone exhibited a weak outlook, the
policies implemented since 2013 to fight
deflation in the Japanese economy, which
entered into recession in the third quarter
of the year, have not yet created the
intended effects. In 2014, emerging market
growth performances remained at lower
levels compared to periods both before
and after the global crisis. In particular, the
slowdown of the momentum of growth in
China, the world’s second largest economy,
has been a factor that increased concerns
about the global economy.
The U.S. asset purchase programwas
concluded.
Despite demonstrating a weak performance
due to adverse weather conditions in the
first quarter of 2014, the U.S. economy
made a strong rebound in subsequent
periods. Due to the marked improvement
Last year, economic growth rates in developing countries
remained at lower levels compared to periods before and
after the global crisis.
in the economy, the Fed decided to taper
and conclude in October 2014 its USD 85
billion monthly asset purchases that had
taken place for over two years. With the
starting of the termination of extraordinary
monetary policies that were commissioned
in the global post-crisis era in the U.S., the
proper conditions for the Fed to increase
interest rates began to form. This situation
brings with it the strengthening of the U.S.
Dollar against other major currencies.
Weak economic activity in the
Eurozone required the adoption
of newmeasures.
Due to quite weak economic activity in the
Eurozone in 2014, the European Central
Bank (ECB) decreased its policy interest rate
to near zero to stimulate the economy. The
ECB also decided to pay negative interest
on bank deposits held in its accounts. In
addition, the ECB began providing large
amounts of liquidity to the market by
means of targeted long-term refinancing
operations and asset purchase programs.
However, as a result of both the failure
of these measures which were meant to
create the desired results and the decline in
oil prices, Eurozone annual inflation in 2014
came in at - 0.2%, indicating deflation.
-0.2%
In 2014, annual inflation in the
Eurozone dropped to -0.2%,
indicating deflation.
In October 2014, the
Fed decided to end
its massive bond-
buying program, the
latest round of which
continued for more
than two years.