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21
VAKIFBANK ANNUAL REPORT 2013
TURKISH ECONOMY
Turkey grew beyond expectations
Turkey’s Gross Domestic Product (GDP) grew
4.4% at fixed prices in the third quarter of
2013 compared to the same quarter of the last
year. In the first two quarters of the year, the
Turkish economy expanded at annual rates of
3.0% and 4.5%, respectively. In the first nine
months of 2013, the economy grew by 4%
over same period of 2012 in real terms. GDP at
current prices was up by 10% over the same
period of the previous year while the annual
increase in the first nine months of the year
corresponded to 9.7%. As evidenced by GDP
figures, Turkey’s economy performed stronger
than expected in the third quarter of 2013.
While the seasonality had a positive impact in
GDP growth, the increased growth is obvious
even after the calendar effect adjustment.
Consumption expenditures
Having contracted 0.6% on annual and
contributing basis negatively to growth in
2012, consumption expenditures grew by
4.7% in the first three quarters of 2013
over the same period of the previous year
and became the expenditure group that
provided the highest contribution to GDP
growth with 3.3 percentage points. While
public consumption expenditures remained
almost the same, investment expenditures
slowed down in the third quarter following
rapid growth in the first two quarters. Private
sector investment expenditures, which
tended to decrease since the first quarter of
2012, achieved rapid growth with 5.3% in
the third quarter of 2013. Net exports, which
contributed positively with 4.1 percentage
points to the GDP growth in 2012, had a
negative 2.2 percentage point contribution in
the first three quarters of 2013.
Hotels and restaurants became the fastest
growing sector in the first nine months of
2013 over the same period of 2012 with
10.5% growth, followed by financial services
with 8.7% growth and the construction
sector with 7.4% growth. The manufacturing
industry, having the highest share in GDP with
24.4%, grew 3.5% in the first nine months
of 2013 in line with the gradual increase in
private sector investment spending.
Generally, real GDP growth data showed that
the increase in growth in the second quarter
of 2013 was transferred to the third quarter
with the added contribution of seasonality
effects. The ongoing forward momentum
in growth, that becomes significant in the
second quarter and into the third quarter,
increased the probability of our 2013 GDP
growth forecast of 3.7%. In the last quarter
of 2013, if seasonal factors turn negative, the
growth rate may remain below third quarter.
Turkey will maintain its growth
performance in 2014
The economy of the Euro zone, Turkey’s
largest foreign trading partner, is expected
to continue its gradual recovery in 2014.
Disturbances in the economic dynamics of the
Euro zone are among factors that could affect
Turkey’s growth performance via external
demand channels. With the Fed’s December
2013 decision to reduce its asset purchases
by US$ 10 billion each month beginning in
January 2014, a period of relatively low US
dollar liquidity has started on a global scale.
At present, due to easing of concerns about
the Fed’s exit strategy from its expansionary
monetary policy, a significant deterioration is
not expected in international capital inflows
in the short term. With these expectations,
Turkey is predicted to maintain its rising
growth performance in 2014.
GDP
(Real/yoy, %)
and Industrial Production Index
(yoy,%)
20
15
10
5
0
-5
-10
-15
-20
-25
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
Gross Domestic Product (y-y, %)
Industrial Production Index (y-y, %)
Source: TURKSTAT