VKF_FRAE_2017

PART I: INTRODUCTION 32 VakıfBank Annual Report 2017 After growing by 3.2% in 2016, the global economy had 3.6% growth rate in 2017. THE WORLD AND TURKEY IN 2017 GLOBAL ECONOMY REAL GROWTH (Y-Y, %) »» THE GLOBAL ECONOMY CONTINUES TO EXHIBIT SIGNS OF MODERATE RECOVERY. After growing by 3.2% in 2016, the global economy had 3.6% growth rate and it is expected by the IMF to close the year 2018 with a growth rate of 3.7%. The US economy, which leads the developed economies, displayed 2.6% growth in the last quarter of 2017, thus bringing the overall growth rate for 2017 to 2.3%. Although the 4 th quarter growth figure in the USA was below expectations, personal consumption expenditure -which accounts for the largest share of growth- registered its largest increase in the last two years that is 3.8%. The USA is expected to close the year 2018 and 2019 with respective growth rates of 2.5% and 2.1% owing to the new tax law passed by the Trump administration and the Fed’s prudent interest rate increases. In the last quarter of 2017, the Euro Zone grew 0.6% over the prior quarter and 2.7% year-over-year. As such, the Euro Zone grew for 19 quarters in a row. In 2017, the Euro Zone economy is expected to grow by 2.1%, according to IMF estimates. The Euro Zone is expected to close the year 2018 at a growth rate of 2.3% in 2018 and the year 2019 at 1.9%. In the third quarter, the Japanese economy grew at a high-than-expected rate of 2.5% on an annual basis. Thus, the Japanese economy registered growth in the last seven quarters. It is estimated that the Japanese economy will complete 2017 with 1.7% growth and 2018 with 1.3% growth. Having an important role in growth performance of global markets, China displayed its weakest growth for 26 years with 6.7% in 2016. The Chinese economy grew 6.8% year-on-year in the last quarter of 2017, and closed the year with a growth rate of 6.9%. However, it is considered that China’s private sector debt burden on the rise since 2009 will remain a risk factor for the economy. On the other hand, in its global economic outlook report, the OECD revised its previous 3.5% global growth estimate for 2017 up to 3.6%, and forecast growth figures of 3.7% and 3.6% for 2018 and 2019, respectively. Source: IMF *2018 estimated numbers. The US economy, which leads the developed economies, displayed 2.6% growth in the last quarter of 2017, thus bringing the overall growth rate for 2017 to 2.3%. -6.0 -4.0 -2.0 -0.0 2.0 4.0 6.0 8.0 10.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * Developing Countries Developed Countries World