Post on 29-Jun-2020
Utku ŞEN
Making Cooperation Work
For Building an Interdependent Islamic World
COMCEC
FINANCIAL OUTLOOK
COMCEC STRATEGY
6th Meeting of COMCEC Financial Cooperation Working Group
March 17th, 2016
Ankara, Turkey
2 For Building an Interdependent Islamic World
COMCEC STRATEGY Making Cooperation Work
OUTLINE
Recent Developments
Financial Outlook
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COMCEC STRATEGY Making Cooperation Work
RECENT
DEVELOPMENTS
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COMCEC STRATEGY Making Cooperation Work
Recent Developments
Gradual slowdown and rebalancing of economic
activity in China
Gradual tightening monetary policies in US as other
major central banks continue to ease monetary
policies
Lower energy and commodity prices
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Recent Developments
United States
Recovery in the US is
stronger than expected.
Unemployment is back
below 5% for the first time
since 2008.
Fed raised interest rate 25
bps at the end of the 2015.
Source: IMF, U.S. Bureau of Labor Statistics
4%
5%
6%
7%
8%
9%
10%
11%
Unemployment Rate
2,6% 2,8% 2,8%
0,0%
1,0%
2,0%
3,0%
4,0%
2015 2016 2017
GDP Growth Rate
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Recent Developments China
Lowering economic growth
Faster than expected slowdown in
imports and exports. In February,
exports felt by 25.4%.
Weaker investment and
manufacturing activity
Sliding trend in Shanghai Stock
Exchange around 20% YTD 2500300035004000450050005500
Shanghai Stock Exchange
5,0%
5,5%
6,0%
6,5%
7,0%
7,5%
2014 2015 2016 2017
GDP Growth Rate
Source: IMF, Quandl
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Recent Developments
Euro Area
Monetary easing continues
ECB cut the Eurozone interest rate to
zero in March 2016.
Despite the monetary easing by ECB,
inflation still in an irregular path
Credit conditions are improving and
credit demand is picking up
Government debt, unemployment and
low nominal growth remain downside
risks
Source: Eurostat
-0,8%
-0,6%
-0,4%
-0,2%
0,0%
0,2%
0,4%
Euro Area Inflation Rate
2,0 € 2,2 € 2,4 € 2,6 € 2,8 € 3,0 €
ECB Balance Sheet (Tn.)
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Recent Developments Emerging Markets
Vulnerabilities remain elevated, risk
appetite has fallen, and market liquidity
risks are higher.
sensitivity to a tightening of global
financial conditions.
nonperforming loans are set to rise as
corporate earnings and asset quality
deteriorate
Economic growth is projected to
decline.
Source: IMF, FRED
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
Crude Oil
0,0%
2,0%
4,0%
6,0%
8,0%
GDP Growth Rate
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COMCEC STRATEGY Making Cooperation Work
Recent Developments
Source: IMF Database
1,9% 2,1% 2,1%
1,5% 1,7% 1,7%
2,5%
4,5%
5,3%
0%
1%
2%
3%
4%
5%
6%
2015 2016 2017
GDP Growth Rates
Advanced Economies Euro area OIC World
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FINANCIAL OUTLOOK
OF OIC MEMBER
COUNTRIES
10
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FINANCIAL DEPTH
• Measures the size of financial institutions and markets
FINANCIAL ACCESS
• Measures to the degree to which individuals can use financial institutions and markets
FINANCIAL EFFICIENCY
• Measures the efficiency of financial institutions and markets in providing financial services
FINANCIAL STABILITY
• Measures the stability of financial institutions and markets
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Selected Financial Data
Indicators
DEPTH
Domestic credit to private sector by banks (% of GDP)
Market capitalization to GDP
Stocks Traded, Total Value (% of GDP)
ACCESS Bank account per 1,000 adults
Number of bank branches per 100,000 adults
EFFICIENCY Bank Return on Asset (ROA)
Bank Return on Equity (ROE)
STABILITY Bank Nonperforming Loans to Total Loans
Regulatory Capital to Risk-Weighted Assets
Source: World Bank
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Categorization of COMCEC Member States
Categories Countries Number of
Countries
OIC-Low income group
US$ 1045 or less (LIG)
Afghanistan, Benin, Burkina Faso, Chad, Comoros, The
Gambia, Guinea, Guinea Bissau, Mali, Mozambique, Niger,
Sierra Leone, Somalia, Togo, Uganda
15
OIC-Lower middle income
group
US$ 1,046 to US$ 4,125
(LMIG)
Bangladesh, Cameroon, Côte d'Ivoire, Djibouti, Egypt,
Guyana, Indonesia, Kyrgyz Republic, Mauritania, Morocco,
Nigeria, Pakistan, State of Palestine, Senegal, Sudan, Syria,
Tajikistan, Uzbekistan, Yemen
19
OIC-Upper middle income
US$ 4,126 to US$12,735
(UMIG)
Albania, Algeria, Azerbaijan, Gabon, Islamic Republic of Iran,
Iraq, Jordan, Kazakhstan, Lebanon, Libya, Malaysia,
Maldives, Suriname, Tunisia, Turkey, Turkmenistan
16
OIC-High income group
US$ 12,736 or more
(HIGH)
Bahrain, Brunei Darussalam, Kuwait, Oman, Qatar, Saudi
Arabia, United Arab Emirates 7
Source: World Bank
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FINANCIAL DEPTH
FINANCIAL ACCESS
FINANCIAL EFFICIENCY
FINANCIAL STABILITY
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FINANCIAL DEPTH
1 • Domestic credit to private
sector by banks (% of GDP)
2 • Market capitalization to
GDP ratio
3 • Stocks Traded, Total Value
(% of GDP)
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COMCEC STRATEGY Making Cooperation Work
Domestic Credit to Private Sector by Banks (% of
GDP)
Source: World Bank
0%
10%
20%
30%
40%
50%
60%
70%
OIC LIG OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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Market Capitalization to GDP Ratio
Source: World Bank
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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Stocks Traded, Total Value (% of GDP)
Source: World Bank
0%
10%
20%
30%
40%
50%
60%
OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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FINANCIAL DEPTH
FINANCIAL ACCESS
FINANCIAL EFFICIENCY
FINANCIAL STABILITY
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FINANCIAL ACCESS
1 • Bank account per 1,000
adults
2 • Bank Branches per
100,000 adults
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Bank Account Per 1,000 Adults
Source: World Bank
0
200
400
600
800
1.000
1.200
OIC LIG OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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Bank Branches per 100,000 adults
Source: World Bank
0
5
10
15
20
25
30
OIC LIG OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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COMCEC STRATEGY Making Cooperation Work
FINANCIAL DEPTH
FINANCIAL ACCESS
FINANCIAL EFFICIENCY
FINANCIAL STABILITY
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COMCEC STRATEGY Making Cooperation Work
FINANCIAL EFFICIENCY
1 • Bank Return on Asset
(ROA)
2 • Bank Return on Equity
(ROE)
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Bank Return on Asset (ROA)
Source: World Bank
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
OIC LIG OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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Bank Return on Equity (ROE)
Source: World Bank
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
OIC LIG OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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FINANCIAL DEPTH
FINANCIAL ACCESS
FINANCIAL EFFICIENCY
FINANCIAL STABILITY
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FINANCIAL STABILITY
1 • Bank Nonperforming Loans to
Total Loans
2 • Regulatory Capital to Risk-
Weighted Assets
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Bank Nonperforming Loans to Total Loans
Source: World Bank
0%
2%
4%
6%
8%
10%
12%
OIC LIG OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2013
2014
2015
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Regulatory Capital to Risk-Weighted Assets
Source: World Bank
0%
5%
10%
15%
20%
25%
OIC LIG OIC LMIG OIC UMIG OIC HIGH OIC Average Rest of World
2012
2013
2014
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Overall Assessment for OIC Member States
Inclusive growth policies can be implemented with comprehensive financial sector strategies including Islamic Finance strategies
Effective financial markets can help channeling global
funds to the real sector in OIC Member States
There is significant potential of financial inclusion. As a pillar of this, easing access to finance is critical for further development
Considering the volatility and uncertainty in the global markets, contingency plans are important for risk management
Thank You
Making Cooperation Work
For Building an Interdependent Islamic World COMCEC STRATEGY
6th Meeting of COMCEC Financial Cooperation Working Group
March 17th, 2016
Ankara, Turkey