TURKEY: RECENT DEVELOPMENTS January July 2019 · Portfolio Inflows (12-month cumulative, bn USD)...
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TURKEY: RECENT DEVELOPMENTS January – July 2019
Transcript of TURKEY: RECENT DEVELOPMENTS January July 2019 · Portfolio Inflows (12-month cumulative, bn USD)...
TURKEY: RECENT DEVELOPMENTSJanuary – July 2019
3,1
4,3
5,2
1999 - 2004 2005 - 2010 2011 - 2019
Avg. Real GDP Growth (%)
100
125
150
175
200
225
250
275
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Real GDP Growth (Index: 2002=100)
Poland 4,0%Romania 4,0%
Czechia 2,9%
Hungary 2,1%
Avg. GDP Growth
(2003-’18)
Turkey 5,6%
2
Per capita GDP tripled while nominal GDP quadrupled in last 15 years
Source: Turkstat, CBRT, IMF as of July 2019Estimated data were used for 2019.
238312
405
501551
675
765
644
772832
874950 934
859 863 852
766706
2002 2004 2006 2008 2010 2012 2014 2016 2018
Nominal GDP (bn USD)
World Economic Outlook (April 2019)
3 5
89 4 6
43 5
95
3 7 2
78
7 8
99
9 5
63
10
69
2
8 8
82 1
0 4
76
11
14
1
11
55
3
12
39
5
12
02
2
10
91
5
10
81
7
10
53
7
9 3
46
8 5
07
2002 2004 2006 2008 2010 2012 2014 2016 2018
Per capita GDP (usd)
2019 E
2019 E E
85
90
95
100
105
110
115
120
2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Working Age Population(15-64) (Index: 2014=100)
45
50
55
60
65
70
2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Total Dependency Ratio(%, Age: 0-14 & 64)/Age: 15-64)
-0,05 -0,03 -0,01 0,01 0,03 0,05
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
TURKEY
Females Males
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
100+
-0,05 -0,03 -0,01 0,01 0,03 0,05
EUROPE
Males Females
3Source: Turkstat, Eurostat, UN as of July 2019
Favourable Demographics: Half of population under age 30
Turkey
EuropeTurkey
Europe
0,05 0,03 0,01 0,05 0,03 0,01
20 20 21 21
22
2324
25
2627
2728
2928
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Employment (mio)
4Source: Turkstat* Latest Figure: April 2019
High potential with young population and improving workforce
2014-18 avg.827k
2006-13 avg.621k
700k new job is created between 2006-18 in each
year averagely .
2019 verisi Nisan ayını göstermektedir.
9,0 9,210,0
13,1
11,1
9,18,4 9,0
9,9 10,310,9 10,9 11,0
13,0
44,5 44,3 44,9 45,7 46,5 47,4 47,6 48,350,5 51,3 52,0 52,8 53,2 52,9
20
30
40
50
60
5
10
15
20
25
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Unemployment rate (%)
Labor Participation Rate (%)
*
*
Maastricht criterion
5Source: Bloomberg, IMF as of April 2019
Maastricht criterion: 3%
Strong fiscal discipline has been the main pillar of economic policy
* Latest figure: March 2019
Turkey
Eurozone
40,136,5
32,7 31,4 28,8 27,6 28,3 28,3 29,1 29,9
84,6 86,6 89,7 91,6 91,8 89,9 89,1 86,8 85,0 83,6
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General Government Debt Stock (%GDP)
Turkey Eurozone
E
3,5
1,3
1,9
1,0 1,1 1,0 1,1
1,5
2,02,3
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Budget Deficit (%GDP)
* Latest figure: March 2019
2,4 2,5 2,9
5,2
9,5 9,08,5
7,0 7,0
4,25,2 4,9 4,7
3,8 4,1 4,4 3,94,7
6,9
5,4
3,7
2,21,3 0,7
2,7 2,7 3
0
3
6
9
12
2011 2012 2013 2014 2015 2016 2017 2018 2019
Peers' Budget Deficit (%GDP)
Brazil S. Africa Romania
135 152 152 158 144 143 157 168 169
241 237 252 242207 199
234 223199
10583
9984
6356
7755
29
-150
-100
-50
0
50
100
0
50
100
150
200
250
300
350
400
450
2011 2012 2013 2014 2015 2016 2017 2018 2019
Trade Balance (bn USD, 12-month cumulative)
Total Exports Total Imports Foreign Trade Gap
6Source: Bloomberg, Turkstat, WTO*as of June 2019
Decreasing trade gap with diversified export markets
* Latest figure: June 2019
Composition of Imports (%)
46
3942
43 4448 47
50
21
28
23 22 22 22 23
18
2011 2012 2013 2014 2015 2016 2017 2018
Exports (% of total)
EU Near and Middle Eastern
68,7%
16,7%
14,7%
2009
77,6%
13,0%
9,4%
2019
* Latest figure: June 2019
0,8%
0,8%0,8%
0,9%0,9%
1,0%1,0%
1,1%
2011 2012 2013 2014 2015 2016 2017 2018
Turkey's Share in World Total Export
4,2
5,7 5,4 5,1
1,8
5,8
9,0
5,5
6,7
4,7
3,7 3,8
5,6
3,5
0,3
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Current Account Deficit (% GDP)
7Source: Bloomberg, CBRT, UNCTAD
Current account deficit is decreasing
* Latest figure: Q1, 2019
-15
-10
-5
0
5
10
15
20
25
30
35
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Portfolio Inflows(12-month cumulative, bn USD)
Equity Security
0
5
10
15
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Foreign Direct Investment Inflows(12-month cumulative, bn USD)
0,4%
1,0%
0,0%
0,2%
0,4%
0,6%
0,8%
1,0%
1,2%
1,4%
1,6%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Turkey's Share in Global FDI Inflows
* Latest figure: July 2019* Latest figure: May 2019
8Source: Bloomberg, CBRT
Central bank is implementing tight monetary policy
79
0
20
40
60
80
100
120
140
160
180
200
Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19
One Week Repo Overnight Lending
Late Liquidity Window Net Open Market Operations
15,7
4
6
8
10
12
14
16
18
20
22
24
26
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Annual CPI (%)
3,2
3,6
4,0
4,4
4,8
5,2
5,6
6,0
6,4
6,8
7,2
7,6
8,0
Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19
USD/TRY Basket (0.5 EUR & 0.5USD) EUR/TRY* Latest figure: June 2019
19,75
6
9
12
15
18
21
24
27
30
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19
Interest Rate Corridor Overnight Lending RateOvernight Borrowing Rate 1-week REPO RateLate Liquidity Window Lending Rate CBRT Average Funding Rate - 5 day MA
9Source: IMF FSI Latest Available Data for Each Country by Jul 2019.BRSA data are used for Turkey
Well capitalized, strong banking sector attracts foreign interest
6,2
2,62,3
1,8 1,71,4 1,4
1,1 1,0 1,0 0,9 0,8 0,7 0,7 0,6 0,6 0,5 0,5 0,4 0,4 0,4 0,4 0,3 0,2
0,0-1
0
1
2
3
4
5
6
7
Arg
enti
na
Ind
on
esia
Mex
ico
Turk
ey
Bra
zil
Hu
nga
ry
Ru
ssia
Cze
ch R
ep.
Can
ada
Ch
ina
Irel
and
Au
stri
a
Po
lan
d
Po
rtu
gal
Ne
the
rlan
ds
Spai
n
UK
Ital
y
USA
Fran
ce
Bel
giu
m
Ge
rman
y
Jap
an
Gre
ece
Ind
ia
Return on Assets (ROA) (%)56
21 2017 17 16 15 14 13
11 11 10 8 8 7 7 7 6 6 6 6 5 4 2
0-10
0
10
20
30
40
50
60
Arg
enti
na
Mex
ico
Can
ada
Turk
ey
Cze
ch R
ep.
Ind
on
esia
Bra
zil
Hu
nga
ry
Ch
ina
Ru
ssia
Ne
the
rlan
ds
Au
stri
a
Spai
n
UK
Jap
an
Po
lan
d
Po
rtu
gal
Fran
ce
Irel
and
Ge
rman
y
Ital
y
Bel
giu
m
USA
Gre
ece
Ind
ia
Return on Equity (ROE) (%)
2523
2220
19 19 18 18 18 18 18 18 18 1716 16 16 15 15 15 15 15 14
13 12
0
5
10
15
20
25
30
Irel
and
Ind
on
esia
Ne
the
rlan
ds
UK
Fran
ce
Ge
rman
y
Cze
ch R
ep.
Au
stri
a
Po
lan
d
Bel
giu
m
Bra
zil
Hu
nga
ry
Turk
ey
Jap
an
Ital
y
Arg
enti
na
Gre
ece
Mex
ico
Spai
n
Can
ada
Po
rtu
gal
USA
Ch
ina
Ind
ia
Ru
ssia
Capital Adequacy Ratio (CAR) (%)
0 1 1 1 2 2 2 2 2 2 2 2 3 3 3 4 4 4 5 68 9 9 11
42
0
5
10
15
20
25
30
35
40
45
Can
ada
USA
Jap
an UK
Ge
rman
y
Ch
ina
Ne
the
rlan
ds
Au
stri
a
Mex
ico
Bel
giu
m
Hu
nga
ry
Ind
on
esia
Fran
ce
Cze
ch R
ep.
Bra
zil
Spai
n
Po
lan
d
Arg
enti
na
Turk
ey
Irel
and
Ital
y
Po
rtu
gal
Ind
ia
Ru
ssia
Gre
ece
Non-performing Loans to Total Gross Loans (NPL)
(%)
10Source: BRSA
Legal limit of %8
Target Rate of %12
The banking sector grew as a result of its strong asset quality and was able
to maintain high profits
1.007 1.218
1.371
1.7321.994
2.357
2.731
3.258
3.8674.234
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Banking Sector Total Asset (billion TL)
1,16 1,50 1,62 1,440,60
11,28
14,28
15,8814,75
5,86
0,00
4,00
8,00
12,00
16,00
20,00
Dec-2015 Dec-2016 Dec-2017 Dec-2018 Jul-2019
Profitability Ratio (%)
Net Income / Average Total Assets (%)
Net Income / Average Shareholder's Equity (%)
6,4
4,9
9
3,9
0
3,6
2
3,8
2
5,5
7
3,8
0
2,7
8
2,9
5
2,8
3
2,9
4
3,2
0
3,3
5
3,0
5
4,0
4 4,5
8
2004 2007 2010 2013 2016 2019
Non-Performing Loan Ratio (%)
* Latest figure: June 2019
19,0
16,617,9
15,316,3
15,6 15,616,9 17,3 17,7
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capital Adequacy Ratio (%)
* Latest figure: June 2019
* Latest figure: June 2019
11Source: Turkstat, WTTC** Last data point covers the past 4 periods.
Tourism revenues and number of visitors doubled between 2004-2018.
Strong recovery in 2018!
* Based on WTTC data
3,5
4,0
4,5
5,0
2004 2007 2010 2013 2016 2019 2022 2025
Direct Contribution to GDP* (%)
0
50
100
2004 2007 2010 2013 2016 2019 2022 2025
Tourism Revenue*
18,1
-60
-40
-20
0
20
40
60
2006 2008 2010 2012 2014 2016 2018
Turkey Foreign Arriving Visitors Change (YoY,%)
* Latest figure: June 2019
1720
1921
25 25 2528 29
3234
31
22
2630
31
1721 19
2326 27 29
31 3134
36 36
25
32
3941
2004 2006 2008 2010 2012 2014 2016 2018
# of Foreign Visitors vs. Revenues
Revenue (bn. USD) # of tourists (mio)
• Latest figure: Q2 - 2019
**
**
12Source: Turkstat, Turkish Airlines Investor Presentation
Air traffic more than tripled in last 10 years
• As of 31.12.2018• Note: Diameters of the bubbles are proportional to the number of passengers carried.
205 out of 261 international destinations
More than 40% of world-wide international traffic
Over 60 national capitals
All of Europe, Middle East, Central Asia and North and East Africa
Narrow Body Range Capability to and from Istanbul(with full passenger payload)
3845 47
5462 65
7888
98
111123
133122
138
154
0
20
40
60
80
100
120
140
160
180
mioPassengers Carried (Turkey)
Domestic (*)
International
Total
(*)Adjusted for double count on Domestic Pax
13
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