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19
VAKIFBANK ANNUAL REPORT 2013
GLOBAL ECONOMY
Moderate growth continues
The global economy, which grew slower
than expected at a rate of 3.2% in 2012 and
showed a mild recovery in the first half 2013,
is forecast to grow below expectations at
3% in 2013, according to the IMF’s recently
released economic outlook report. While
the US economy performed well above
expectations in the fourth quarter, Euro zone
economies presented a limited recovery
following a long-term recession. Regarding
the growth of developing countries that are
important with respect to their contributions
to global growth since the 2008 financial
crisis, the Chinese economy, the engine of the
developing countries, achieved growth slightly
above expectations at 7.7% in the fourth
quarter of 2013. Considering the relatively
limited contribution of developed countries
and the unquestionably significant role of
China in the global economy, housing sector
bubbles and the rapidly growing “shadow
banking” system in China have increased the
downward pressure on global growth.
Monetary easing steps
Central banks continued to apply loose
monetary policies in moderately growing
global economies in 2013. While the central
banks from the US and Japan continued to
2013 IN THE WORLD AND IN TURKEY
In 2013, the central banks of moderately
performing global economies continued
to apply loose monetary policies.
keep interest rates low, the European Central
Bank gradually decreased its policy interest
rate to 0.25% with 25 bps decreases at
meetings held in May and November 2013.
The ECB also signaled that it is considering
implementing a “negative deposit rate” in the
coming periods.
In addition to low interest rate policies, central
banks continued with monetary easing steps.
However, at its December meeting, the Fed
announced that it would taper its monthly
US$ 85 billion asset purchase program, which
continued over a year, by US$ 10 billion
beginning in January 2014. Nevertheless, Fed
Chairman Ben Bernanke stated that if the
recovery of the US employment rate continues
as expected, the asset purchases would likely
to be cut at a “moderate” pace the rest of the
year emphasizing that this decision should not
be perceived as a tightening policy. The Fed
also stated that as long as inflation did not
exceed 2%, the policy rate would continue
to be kept close to zero. The Bank of Japan
(BOJ) on the other hand, started to implement
a more aggressive three-stage expansionary
monetary policy that aims to curb deflation in
2013.
The performance of the US economy
Following the failure of the House of
Representatives and Senate to reach an
agreement on the 2014 fiscal year budget
Real Growth
(y-y,%)
10
8
6
4
2
0
-2
-4
-6
Source: IMF
2000 2001 2002 2004 2000 2005 2006 2007 2008
2010
2009
2011
2013
2012
2014
World
Developed Countries
Developing Countries
Expectation