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İŞBANK
ANNUAL REPORT 2014
16
THE TURKISH
ECONOMY
Macroeconomic Developments
in 2014
Net exports-driven growth
In 2014, as a result of measures taken by
BRSA to curb the growth of retail loans
together with the tight monetary policy
implemented by the Central Bank of the
Republic of Turkey (CBRT), domestic
demand slowed considerably. Accordingly,
as the contribution of private consumption
expenditures to growth has been
decreasing, Turkey achieved net export-
driven growth. Turkey’s economic growth
rate was 2.8% in the first nine months
of 2014, compared to the same period of
the previous year. During this period, the
highest contribution to growth from net
exports by 2.6 percentage points while
consumption expenditures contributed by
1.5 percentage points. Investment spending
had an effect on growth with negative 0.4
percentage points.
Fiscal discipline is maintained
in 2014.
Even though the growth rate of tax
revenue lost some of its momentum in
2014 due to slowing domestic demand, the
central government budget maintained
a positive performance. Turkey’s central
government budget ran a deficit of TL 22.7
billion in 2014, below the year-end target.
Year-end inflation exceeds the target.
Despite weak domestic demand in 2014,
inflation remained above the target
significantly due to lagged effects of the
TL depreciation and high food prices. With
the intensifying impact of decreases in
oil prices on inflation in the second half
of the year, Turkey’s annual inflation lost
momentum and stood at 8.17% at the end
of the year.
In line with the strong course of net
exports, Turkey’s foreign trade deficit
contracted by 15.4% in 2014, compared
to the prior year, to USD 84.5 billion. While
the share of EU countries in exports rose
in 2014, the conflicts in the Middle East
resulted in a decrease in the share of that
region in total exports.
In 2014, due both to weak domestic
demand and a decrease in the foreign
trade deficit, the current account deficit
narrowed considerably. The current account
deficit decreased by USD 18.8 billion from
last year, to USD 45.8 billion in 2014.
While the contribution of private consumption
expenditures to economic growth fell in 2014,
Turkey experienced net exports-driven growth.
GDP - Sectoral Growth Rates
(*)
(%)
-4
0
4
8
12
2013
2014
(*)
(*)
As of January-September.
AGRICULTURE
INDUSTRY
SERVICES
CONSTRUCTION
CONSTRUCTION
GDP
GDP
SERVICES
INDUSTRY
AGRICULTURE