Date post: | 09-May-2015 |
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By Group 8Srinath Guhan 1301-223
Siddharth Jindal 1301-215Vaibhav Kango 1301-577
Aditya Vikran Agrawal 1301-304
Charu Sharma 1301-056V Raghavendra 1301-428
*TURKEY –EMERGING MARKET
*Agenda
Introduction about Turkey
Characteristics of an Emerging Market
Economic Development Indicators
Turkey and EU Relation
Economic Performance• Strengths • Weaknesses
Attractiveness Indicators
Economic Forecast
*Introduction
• Turkey which lies in the heart of Europe has literally become the heart of Europe
• Being in a strategic location that links Asia and Europe, Turkey has significant geostrategic importance
• Turkey has world’s 15th largest GDP and 17th largest nominal GDP
• One of the founding members of Organization for Economic Co-operation and Development (OECD) and G-20 major economies
• Turkey is also a member of MINT countries
*Important Events
1923
• Republic of Turkey was established
1963
• Association agreement signed with EEC (European Economic Community)
1995
• Turkey and EU formed Joint Consultative committee proposed by EEC
2005
• New lira currency introduced as six zeroes are stripped from old lira, ending an era in which banknotes were denominated in millions.
• EU membership negotiations officially launched after intense bargaining.
2013
• The EU announces that membership talks with Turkey will restart in November.
*Emerging Market Characteristics
Transitional Economy -
Young and Growing
Population
Underdeveloped
Infrastructure
Increasing Foreign
Investment
*Economic Development IndicatorsIndicator Name Indicator Code 2004 2005 2006
GNI per capita, PPP (current international $)
NY.GNP.PCAP.PP.CD 10150 11390 12860
Population (Total) SP.POP.TOTL 66845635 67743052 68626337
GDP (current US$) NY.GDP.MKTP.CD 3.9217E+11 4.8298E+11 5.309E+11
GDP growth (annual %) NY.GDP.MKTP.KD.ZG 9.36280885 8.40161747 6.8934901
Life expectancy at birth, total (years) SP.DYN.LE00.IN 72.011122 72.4283659 72.8157317
2007 2008 2009 2010 2011 2012
13880 15000 14380 15810 17070 18190
69496513 70363511 71241080 72137546 73058638 73997128
6.4716E+11 7.3034E+11 6.14554E+11 7.31144E+11 7.7478E+11 7.8926E+11
4.66858113 0.658841 -4.82587996 9.156954024 8.7727463 2.23917967
73.1819268 73.5341951 73.87609756 74.21119512 74.5404878
*GDP Growth of Turkey
2004 2005 2006 2007 2008 2009 2010 2011 2012-6
-4
-2
0
2
4
6
8
10
12
GDP Growth(%)
GDP Growth(%)
*FDI Inflows 19
7319
7419
7519
7619
7719
7819
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
110
500000000
1000000000
1500000000
2000000000
2500000000
3000000000
3500000000
*Turkey and EU Relation
*Turkey was associated with EEC (European Economic Committee) in 1963
*European Union was formed in 1993
*The external relationship i.e. JCC (Joint Consulate Committee) of Turkey with EU was formed in 1995
*The violence and the poor status of Turkey was one of the main reasons for non inclusion
*However, the talks are still going on for the inclusion of Turkey into EU
*For Turkey
*The advantages of Turkey being included in EU are:
The Inclusion will unite western Christians and Muslim world as 99.8% of Turkey’s population are Muslims
The inclusion will make EU stable both economically as well as politically
European Military power will increase as Turkey is a member of NATO (North Atlantic Treaty Organization)
The young work force of Turkey will add new flavor to the usually old work force of EU
Turkey is a very large country of around 70 million populations, hence the business prospects for EU will see a considerable growth
*Against Turkey
*The disadvantages of Turkey being included into EU are:
1Most part of Turkey belongs to Asia not EuropeThe possible immigration of Turkish nationals to
other countries in European is a bone of contention amongst most nations
As it is one of the largest countries, other countries are worried that it may command EU in the future
In comparison to the 27 other nations in the EU, Turkey is a poor country. This will result in a significant cost for the EU
* Strengths of Economic Performance
ECONOMIC PERFORMANCE WCY 2013
STRENGTHS Value
Relocation of services 6.3
is not a threat to the future of your economy (Survey)
Relocation of R&D facilities 6.2
is not a threat to the future of your economy (Survey)
Relocation of production 5.7
is not a threat to the future of your economy (Survey)
Resilience of the economy to economic cycles is 6.7
strong (Survey)
Diversification of the economy (industries, export markets, etc.) 6.5
is extensive (Survey)
Tourism receipts (%) 3.6
International tourism receipts as a percentage of GDP
Long-term unemployment 1.7
Percentage of labor force
Direct investment flows inward ($bn) 12.4
US$ billions
Real GDP growth 2.2
Percentage change, based on national currency in constant prices
Exports of commercial services ($bn) 42.1
US$ billions
*Weaknesses of Economic Performance
WEAKNESSES
Employment (%) 33.2
Percentage of population
Consumer price inflation 8.9
Average annual rate
Current account balance (%) -6.0
Percentage of GDP
Direct investment stocks abroad (%) 3.1
Percentage of GDP
Exports of goods (%) 19.3
Percentage of GDP
Direct investment stocks inward (%) 18.0
Percentage of GDP
Trade to GDP ratio 28.4
(Exports + Imports) / (2 * GDP)
GDP per capita 10564.6
US$ per capita
Unemployment rate 9.2
Percentage of labor force
GDP (PPP) per capita 17209.4
Estimates; US$ per capita at purchasing power parity
*Attractiveness Indicators
Turkey - Key Attractiveness Indicators
Dynamism of the economy 80.36
Cost competitiveness 55.36
Skilled workforce 51.79
Business-friendly environment 42.86
Open and positive attitudes 35.71
Access to financing 30.36
Policy stability & predictability 28.57
Competency of government 19.64
Reliable infrastructure 17.86
High educational level 17.86
Effective labor relations 16.07
Quality of corporate governance 7.14
Effective legal environment 5.36
Strong R&D culture 1.79
Competitive tax regime 1.79
*International Assumptions for
Economic Forecast
Economic growth (%)
2012a 2013b 2014b 2015b 2016b 2017b
US GDP 2.2 2.1 2.4 2.3 2.3 2.4
OECD GDP 1.4 1.2 2 2.1 2.2 2.2
EU27 GDP -0.3 -0.4 0.8 1.4 1.5 1.5
World GDP 2.1 2.1 2.7 2.9 2.9 2.9
World trade 2.7 4 5.2 5.4 5.5 5.6
Inflation indicators (% unless otherwise indicated)
US CPI 2.1 2.1 2.4 2.2 2.3 2.3
OECD CPI 2.2 2 2.3 2.3 2.2 2.2
EU27 CPI 2.6 2 2 2.2 2.1 2.2
Manufactures (measured in US$) -0.6 -3 0.7 1.2 1.4 1.8
Oil (Brent; US$/b) 112 106.6 104.8 107.3 110 115
Non-oil commodities (measured in US$) -10.8 -2.3 0.5 -1.4 4 2.2
Financial variables
US$ 3-month commercial paper rate (avg. %) 0.2 0.2 0.2 0.3 1.2 2.2
€ 3 month interbank rate (avg. %) 0.6 0.2 0.4 0.9 1.4 1.8
Exchange rate TL:US$ (avg.) 1.8 1.82 1.88 1.9 1.88 1.86
Exchange rate US$:€ (avg.) 1.29 1.31 1.29 1.27 1.26 1.26
*Forecast Summary
Forecast Summary2012a 2013b 2014b 2015b 2016b 2017b
Real GDP growth 2.2 3.5 5 5.1 5 4.9
Industrial production growth 2.4 3.5 5 5.5 5 4.5
Gross fixed investment growth -2.5 3.5 7.5 8 8 8
Unemployment rate (avg.) 9.2 9 8.2 7.1 7 6.3
Consumer price inflation (avg.) 8.9 7.4 6.7 5.3 4.9 4.4
Consumer price inflation (end-period) 6.2 7.3 6.3 5.4 4.6 4.1
Short-term interbank rate 5 5 5 5 5.5 5.8
Government balance (% of GDP) -2 -2.8 -2.9 -2.7 -2.2 -2.3
Exports of goods fob (US$ bn) 163.4 167.2 180 194.6 213.5 233.9
Imports of goods fob (US$ bn) 228.9 240.6 260.1 282.8 311.5 342.2
Current-account balance (US$ bn) -48.9 -56.2 -62.6 -69.4 -77.3 -86.6
Current-account balance (% of GDP) -6.2 -6.5 -6.7 -6.9 -6.9 -7
External debt (end-period; US$ bn) 336.9 347.8 363.8 378.6 398.7 420.2
Exchange rate TL:US$ (avg.) 1.796 1.818 1.882 1.905 1.881 1.863
Exchange rate TL:US$ (end-period) 1.782 1.831 1.921 1.895 1.876 1.858
Exchange rate TL:¥100 (avg.) 2.251 1.934 1.976 1.979 1.929 1.93
Exchange rate TL:€ (avg.) 2.309 2.409 2.47 2.419 2.37 2.353
*Trend Charts
*Trend Charts
*Major Indicators
Politics
Economy
External Sector
Unemployment rate
Monitory Policy outlook
Manufacturing Sector
*Thank You!