Economic Developments in Turkey

Page 1

Main Economic Developments July 10, 2017

Research and Monetary Policy Department Daily data are updated every Thursday (previous office day if it is a holiday). Other data are updated on the announcement day at 16.00


Contents

Inflation Developments

p. 3-13

International Developments

p.14-30

Labor Market Developments

p.31-36

Balance of Payments Developments

p.37-50

Public Finance Developments

p.51-57

Financial Intermediation and Loans Developments

p.58-73

Financial Markets Developments

p.74-84

Economic Activity Developments

p.85-101

2


Inflation Developments

3


CPI and Special CPI Indicators (Annual Percentage Change) 14

CPI

B

C

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

Source: TURKSTAT.

Last Observation: June 2017.

4


CPI and Subgroups (Annual Percentage Change) 35

Services

Core goods

Food

Energy

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

-5

-5

Source: TURKSTAT.

Food: Food and alcoholic beverages. Core goods: Goods excluding food, energy, alcoholic beverages , tobacco and gold Last Observation: June 2017.

5


Services Inflation (Annual Percentage Change) 24

Other

Communication

Transport

Restaurants and hotels

Rent

24

19

19

14

14

9

9

4

4

-1

-1

-6

-6

Source: TURKSTAT.

Last Observation: June 2017.

6


Inflation Trend Main Inflation Indicators (Seasonally Adjusted Monthly Change, 3-Month Average, Annualized) B

C

20

20

15

15

10

10

5

5

0

0

-5

-5

Source: TURKSTAT, CBRT.

Last Observation: June 2017.

7


Inflation Trend Services Prices (Seasonally Adjusted Monthly Change, 3-Month Average, Annualized) 16

16

14

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

-2

-2

Source: TURKSTAT, CBRT.

Last Observation: June 2017.

8


Inflation Trend Core Goods Prices (Seasonally Adjusted Monthly Change, 3-Month Average, Annualized) 20

20

15

15

10

10

5

5

0

0

-5

-5

-10

-10

Source: TURKSTAT, CBRT.

Core goods: Goods excluding food, energy, alcoholic beverages , tobacco and gold Last Observation: June 2017.

9


Inflation Trend Diffusion Index (Seasonally Adjusted, 3-Month Average) CPI

B

0,6

0,6

0,5

0,5

0,4

0,4

0,3

0,3

0,2

0,2

0,1

0,1

0,0

0,0

Source: TURKSTAT, CBRT.

Diffusion index is calculated as the ratio of the number of items with increasing prices minus the number of items with decreasing prices to total number of items within a given month. Last Observation: June 2017.

10


Contribution to Annual Inflation (Percentage Points) 14

Energy

Services

Core goods

Food

Alcoholic bev. tobacoo and gold

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

-2

-2

Source: TURKSTAT, CBRT.

Food: Food and alcoholic beverages. Core goods: Goods excluding food, energy, alcoholic beverages , tobacco and gold Last Observation: June 2017.

11


Domestic PPI (Annual Percentage Change) 25

Domestic PPI

Manufacturing Industry Prices

25

20

20

15

15

10

10

5

5

0

0

-5

-5

-10

-10

Source: TURKSTAT.

Last Observation: June 2017.

12


Inflation Expectations (Annual Percentage Change) 10

24 Months

12 Months

10

9

9

8

8

7

7

6

6

5

5

4

4

Source: CBRT

Last Observation: June 2017.

13


International Developments

14


Global Inflation (Annual Percentage Change) 10

Advanced Countries

Developing Countries

10

8

8

6

6

4

4

2

2

0

0

-2

-2

Advanced Countries: USA, Euro Area, Japan, UK, Canada, S.Korea, Switzerland, Sweden, Norway, Denmark, Israel. Developing Countries: China, Brazil, India, Mexico, Russia, Turkey, Poland, Indonesia, S.Africa, Argentina, Thailand, Czechia, Colombia, Hungary, Romania, Philippines, Ukraine, Vietnam, Chile, Peru, Egypt, Morocco.

Source: Bloomberg, CBRT.

Last Observation: May 2017.

15


Core Inflation (Annual Percentage Change) Developing Countries

Advanced Countries

6

6

5

5

4

4

3

3

2

2

1

1

0

0

Advanced Countries: USA, Euro Area, Japan, UK, Canada, S.Korea, Switzerland, Sweden, Norway, Israel. Developing Countries: China, Brazil, Mexico, Russia, Turkey, Poland, Indonesia, S.Africa, Thailand, Czechia, Colombia, Hungary, Romania, Chile, Peru.

Source: Bloomberg, Datastream, CBRT.

Last Observation: May 2017.

16


Global Growth (Annual Percentage Change) 10

Advanced Countries

Developing Countries

Developing Countries excluding China and India

10

8

8

6

6

4

4

2

2

0

0

-2

-2

-4

-4

-6

-6

Advanced Countries: USA, Euro Area, Japan, UK, Canada, S.Korea, Switzerland, Sweden, Norway, Denmark, Israel. Developing Countries: China, Brazil, India, Mexico, Russia, Turkey, Poland, Indonesia, S.Africa, Argentina, Thailand, Malaysia, Czechia, Colombia, Hungary, Romania, Philippines, Ukraine, Chile, Peru, Morocco.

Source: Bloomberg, CBRT.

Last Observation: 2017 Q1

17


Global Policy Rates (Percent) Advanced Countries

14

Developing Countries

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

Advanced Countries: USA, Euro Area, Japan, UK, Canada, S.Korea, Australia, Switzerland, Sweden, Norway, Denmark, Hong Kong, Israel, New Zealand. Developing Countries: Brazil, Mexico, Turkey, Poland, Indonesia, S.Africa, Thailand, Czechia, Colombia, Hungary, Romania, Philippines.

Source: Bloomberg, CBRT.

Last Observation: May 2017.

18


Markit Global PMI Indices

70

Manufacturing

Services

70

60

60

50

50

40

40

30

30

Source: Markit.

Last Observation: May 2017.

19


US House Prices (January 2005 = 100) (Seasonally Adjusted) 130

Federal Housing Finance Agency Home Price Index

S&P Case Shiller Home Price Index (USA nationwide)

130

120

120

110

110

100

100

90

90

80

80

70

70

Source: Bloomberg.

Last Observation: March 2017.

20


PMI (Manufacturing)

65 US

Eurozone

Japan

China

50

60

55

50

45

40

35

30

Source: Markit.

Last Observation: May 2017.

21


Unemployment Rates (Percent) 14

US

Eurozone

UK

Japan

12

10

8

6

4

2

0

Source: Bloomberg.

Last Observation: May 2017.

22


Commodity Prices S&P-GS Indices (January 2005 = 100)

350

Energy

Industrial Metals

Agriculture

Headline

350

300

300

250

250

200

200

150

150

100

100

50

50

0

0

Source: Bloomberg.

Last Observation: 05 July 2017.

23


Commodity Prices S&P-GS Indices (Annual Percentage Change) 120

Headline

Energy

Industrial Metals

Agriculture

120

70

70

20

20

-30

-30

-80

-80

Source: Bloomberg.

Last Observation: 05 July 2017.

24


Risk Appetite VIX

80

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

0

Source: Bloomberg.

Last Observation: 30 June 2017.

25


Spread (OIS Spread) (Percent) US Dollar

Euro

4,0

4,0

3,5

3,5

3,0

3,0

2,5

2,5

2,0

2,0

1,5

1,5

1,0

1,0

0,5

0,5

0,0

0,0

-0,5

-0,5

Source: Bloomberg.

Last Observation: 05 July 2017.

26


GIIPS Countries: Yield Spread (over Bunds) Portugal

Spain

Italy

Greece (right axis)

18

36

16

32

14

28

12

24

10

20

8

16

6

12

4

8

2

4

0

0

Source: Bloomberg.

GIIPS: Greece, Italy, Portugal, Spain Last Observation: 05 July 2017.

27


GIIPS Countries: Unemployment (Percent) Portugal

Ireland

Spain

Italy

Greece

30

25

20

15

10

5

0

Source: Bloomberg.

GIIPS: Greece, Ireland, Italy, Portugal, Spain Last Observation: June 2017.

28


Portfolio Flows (Billion US dollars) All developing countries, weekly fund flows 12 10

Equities

Bonds

8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16

Source:EPFR.

Last Observation: 28 June 2017.

29


Portfolio Flows (Billion US dollars) All developing countries, 52-week cumulative 95

95 Bonds

75

Equities

75

55

55

35

35

15

15

-5

-5

-25

-25

-45

-45

-65

-65

-85

-85

-105

-105

Source: EPFR.

Last Observation: 28 June 2017.

30


Labor Market Developments

31


Unemployment Rate (Percent) Unemployment Rate (%)

18

Non-farm Unemployment Rate (%)

18

16

16

14

14

12

12

10

10

8

8

6

6

Source: TURKSTAT, CBRT.

Last Observation: March 2017.

32


Employment (Thousand People) 24000

Non-farm Employment

Farm Employment (right axis)

6600

6300 22000 6000 20000 5700

18000

5400

5100 16000 4800 14000 4500

12000

Source: TURKSTAT, CBRT.

4200

Last Observation: March 2017.

33


Participation Rate (Percent) 54

52

Participation Rate %

Non-farm Labor Force/Population 15+ (%) (right axis)

46

44

42 50 40 48 38 46 36

44

42

Source: TURKSTAT, CBRT

34

32

Last Observation: March 2017.

34


Employment by Sectors (Thousand People) 2200

Construction

Industrial (right axis)

5800

5500

2000 5200 1800 4900

1600

4600

4300 1400 4000 1200 3700

1000

Source: TURKSTAT, CBRT.

3400

Last Observation: March 2017.

35


Employment by Sectors (Thousand People) 16000

Services

15000

14000

13000

12000

11000

10000

9000

8000

Source: TURKSTAT, CBRT.

Last Observation: March 2017.

36


Balance of Payments Developments

37


Foreign Trade

25

Export

Export (excluding gold)

Import

Import (excluding gold)

Import (excluding gold and energy)

25

23

23

21

21

19

19

17

17

15

15

13

13

11

11

9

9

7

7

5

5

Source: TURKSTAT, CBRT.

Last Observation: May 2017.

38

Thousands

(Seasonally Adjusted, 3-Month Moving Average, Billion USD)


Foreign Trade

300

300 Export

Export (excluding gold)

Import

Import (excluding gold)

Import (excluding gold and energy)

250

250

200

200

150

150

100

100

50

50

0

0

Source: TURKSTAT, CBRT.

Last Observation: May 2017.

39

Thousands

(12-month cumulative, Billion USD)


Real Import and Real Export (Index 2010=100, Seasonally Adjusted, 3-month Moving Average) 160

150 Export

150 140

Export (excluding gold)

Import

Import (excluding gold)

Import (excluding gold and energy) 140 130

130 120 120 110 110 100 100 90 90 80

80

70

70

60

60

Source: TURKSTAT, CBRT.

Last Observation: April 2017.

40


Real Import and Real Export (Index 2010=100, Seasonally Adjusted Quarterly) 150

Export

Import

Import (excluding gold and energy)

Export (excluding gold)

Import (excluding gold)

150

140

140

130

130

120

120

110

110

100

100

90

90

80

80

70

70

60

60

Source: TURKSTAT.

Last Observation: 2017 Q1.

41


Current Account Balance (Seasonally Adjusted, Billion USD) Current Account

Current Account (excluding energy and gold)

Current Account (excluding gold)

4

4

2

2

0

0

-2

-2

-4

-4

-6

-6

-8

-8

-10

-10

Source: CBRT.

Last Observation: April 2017.

42


Current Account Balance (Seasonally Adjusted, 3-month Moving Average, Billion USD) Current Account

Current Account (excluding energy and gold)

Current Account (excluding gold)

4

4

2

2

0

0

-2

-2

-4

-4

-6

-6

-8

-8

-10

-10

Source: CBRT.

Last Observation: April 2017.

43


Current Account Balance (12-month Cumulative, Billion USD) Current Account

Current Account (excluding energy and gold)

Current Account (excluding gold)

20

20

10

10

0

0

-10

-10

-20

-20

-30

-30

-40

-40

-50

-50

-60

-60

-70

-70

-80

-80

-90

-90

Source: CBRT.

Last Observation: April 2017.

44


Current Account Balance 0

0

-10

-1

-20

-2

-30

-3

-40

-4

-50

-5

-60

-6

-70

12-month cumulative

-7

3-month moving average (Seas. Adj., right axis) -80

Source: CBRT.

-8

Last Observation : April 2017.

45

Thousands

(Excluding Gold, Billion USD)


Current Account Balance

10

1

0

0

-10

-1

-20

-2

-30

-3

-40

-4

-50

-5

-60 -70 -80

Source: CBRT.

12-month cumulative 3-month moving average (Seas. Adj., right axis)

-6 -7 -8

Last Observation : April 2017.

46

Thousands

(Billion USD)


Current Account Balance (Percent of GDP) Current Account

Current Account (excluding energy and gold)

Current Account (excluding gold)

4

4

2

2

0

0

-2

-2

-4

-4

-6

-6

-8

-8

-10

-10

Source: TURKSTAT, CBRT.

Last Observation: 2017 Q1.

47


Main Sources of External Finance* (3-month cumulative, Billion USD) Portfolio and Short Term

FDI and Long Term

CAD

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

-5

-5

-10

-10

-15

-15

Source: CBRT.

*Long term capital movements are sum of banking and real sectors’ long term net credit and bonds issued by banks and the Treasury. Short term capital movements are sum of banking and real sectors' short term net credit and deposits in banks. Last Observation: April 2017.

48


Main Sources of External Finance* (12-month cumulative, Billion USD) 100

Portfolio and Short Term

FDI and Long Term

CAD

100

80

80

60

60

40

40

20

20

0

0

-20

-20

-40

-40

Source: CBRT.

*Long term capital movements are sum of banking and real sectors’ long term net credit and bonds issued by banks and the Treasury. Short term capital movements are sum of banking and real sectors' short term net credit and deposits in banks. Last Observation: April 2017.

49


Real Exchange Rate CPI Based REER* (2003=100) 150

150

140

140

130

130

120

120

110

110

100

100

90

90

80

80

70

REER

70

Developing Countries Based REER 60 50

Source: CBRT.

Developed Countries Based REER

60 50

*Real effective exchange rate. Last Observation: June 2017.

50


Public Finance Developments

51


Contributions To Primary Expenditures* (12-Month Cumulative, Contribution To Annual Percentage Change) Capital Expenditures

Current Transfers

Good and Services Purchases

Compensation of Employees

Primary Expenditures

26

26

22

22

18

18

14

14

10

10

6

6

2

2

-2

-2

Source: Ministry of Finance. * Principal items have been selected.

Last Observation: May 2017.

52


Contributions To Tax Revenues (12-Month Cumulative, Contribution To Annual Percentage Change) VAT on Imports

Special Consumption Tax

Domestic VAT

Corporation Tax

Income Tax

Tax Revenues

30

30

25

25

20

20

15

15

10

10

5

5

0

0

-5

-5

Source: Ministry of Finance. * Principal items have been selected.

Last Observation: May 2017.

53


Central Government Budget Revenues and Expenditures (12-Month Cumulative, As Percent of GDP) Budget Revenues

Primary Expenditures

23

23

20

20

17

17

14

14

Source: Ministry of Finance, Medium Term Program (2017-2019). * Medium Term Program (2017-2019) target.

Last Observation: 2017 Q1.

54


Central Government Budget Balance (12-Month Cumulative, As Percent of GDP) Budget Balance

Primary Balance

6

6

3

3

0

0

-3

-3

-6

-6

Source: Ministry of Finance, Medium Term Program (2017-2019). * Medium Term Program (2017-2019) target.

Last Observation: 2017 Q1.

55


Program Defined Primary Budget Balance (12-Month Cumulative, As Percent of GDP) Primary Budget Balance (Program Definition) 4

4

2

2

0

0

-2

-2

Source: Ministry of Finance, Undersecreteriat of Treasury, Medium Term Program (2017-2019). * Medium Term Program (2017-2019) target.

Last Observation: 2017 Q1.

56


EU Defined Public Debt (As Percent of GDP) Public Debt Stock 60

60

40

40

20

20

0

0

Source: Undersecreteriat of Treasury, Medium Term Program (2017-2019). * Medium Term Program (2017-2019) target.

Last Observation: 2017 Q1.

57


Financial Intermediation and Loans Developments

58


Total Loans* (Year on Year Change, Percent) 45

Total Loan Growth

Total Loan Growth Rate (FX adjusted)

45

40

40

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

Source: CBRT.

*Total banking sector (Including participation banks) Credit cards included NPLs Excluded Last Observation: 30 June 2017.

59


Commercial and Consumer Loans* (Year on Year Change, Percent) Consumer Loans

Commercial Loans (FX adjusted)

45

45

40

40

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

Source: CBRT.

*Total banking sector (Including participation banks) NPLs Excluded Last Observation: 30 June 2017.

60


Total Loans* (Adjusted for Exchange Rate, 13-Week Average, Annualized+, Percent) 50

50

45

45

40

40

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

Source: CBRT.

+The annual growth rate of credit stock is calculated as the 52nd power of 13-week moving average of

weekly growth rate.

*Total banking sector (Including participation banks) Credit cards included NPLs Excluded Last Observation: 30 June 2017.

61


Commercial and Consumer Loans* (Adjusted for Exchange Rate, 13-Week Average, Annualized+, Percent) Commercial Loans

60

Consumer Loans

60

50

50

40

40

30

30

20

20

10

10

0

0

-10

Source: CBRT.

-10

+The annual growth rate of credit stock is calculated as the 52nd power of 13-week moving average of

weekly growth rate.

*Total banking sector (Including participation banks) NPLs Excluded Last Observation: 30 June 2017.

62


Consumer Loans* (13-Week Average, Annualized+, Percent) Housing

50

Other

Automobile

50

40

40

30

30

20

20

10

10

0

0

-10

-10

-20

-20

-30

-30

Source: CBRT.

+The annual growth rate of credit stock is calculated as the 52nd power of 13-week moving average of

weekly growth rate.

*Total banking sector (Including participation banks) NPLs Excluded Last Observation: 30 June 2017.

63


Total Loans* (Adjusted for Exchange Rate, 13-Week Average, Annualized+, Percent) 50

Total Loans (2017)

Total Loans (2007-2016)

Total Loans (2016)

50

45

45

40

40

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

Source: CBRT.

+The annual growth rate of credit stock is calculated as the 52nd power of 13-week moving average of

weekly growth rate.

*Total banking sector (Including participation banks) Credit cards included NPLs Excluded Last Observation 30 June 2017.

64


Consumer Loans* (13-Week Average, Annualized+, Percent) 50

Consumer loans (2017)

Consumer loans (2007- 2016)

Consumer loans (2016)

50

45

45

40

40

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

Source: CBRT.

+The annual growth rate of credit stock is calculated as the 52nd power of 13-week moving average of

weekly growth rate.

*Total banking sector (Including participation banks) NPLs Excluded Last Observation: 30 June 2017.

65


Commercial Loans* (Adjusted for Exchange Rate, 13-Week Average, Annualized+, Percent) 50

Commercial loans (2017)

Commercial loans (2007-2016)

Commercial loans (2016)

50

45

45

40

40

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0

0

Source: CBRT.

+The annual growth rate of credit stock is calculated as the 52nd power of 13-week moving average of

weekly growth rate.

*Total banking sector (Including participation banks) NPLs Excluded Last Observation: 30 June 2017.

66


Non-Performing Loans (Percent) 7,0

Total Loans

Commercial Loans

Consumer Loans

7,0

6,5

6,5

6,0

6,0

5,5

5,5

5,0

5,0

4,5

4,5

4,0

4,0

3,5

3,5

3,0

3,0

2,5

2,5

2,0

2,0

Source: CBRT. Last Observation: 30 June 2017.

67


Bad Cheque Ratio (Percent) Bad Cheque Ratio (number)

12

Bad Cheque Ratio (amount)

12

10

10

8

8

6

6

4

4

2

2

0

0

Source: CBRT.

Last Observation: June 2017.

68


Loan Rates (Flow, Annualized, Percent, 4 Week-Average) Automobile

Housing

Commercial

Other

26

26

23

23

20

20

17

17

14

14

11

11

8

8

5

5

Source: CBRT.

Last Observation: 23 June 2017.

69


TL Commercial Loan Rate (Flow, 4-Week Average, Percent) 24

Commercial Loan Rate

Commercial Loan Rate-Deposit Rate Spread (right axis)

8

22

7

20

6

18

5

16

4

14

3

12

2

10

1

8

0

Source: CBRT.

Last Observation: 23 June 2017.

70


TL Commercial Loan Rate (Flow, 4-Week Average, Percent) Commercial Loan Rate

Commercial Loan Rate (Excluding Corporate Overdraft Account and Corporate Credit Cards)

18

18

17

17

16

16

15

15

14

14

13

13

12

12

11

11

10

10

9

9

8

8

7

7

6

6

5

5

Source: CBRT.

Last Observation: 23 June 2017.

71


TL Commercial Loan Rate (Flow, 4-Week Average, Percent) Commercial Loan Rate-Deposit Rate Spread 7

Commercial Loan Rate (Excluding Corporate Overdraft Account and Corporate Credit Cards) - Deposit Rate Spread

7

6

6

5

5

4

4

3

3

2

2

1

1

0

0

Source: CBRT.

Last Observation: 23 June 2017.

72


Indebtedness and Leverage Ratios of Non-Financial Companies Listed on BIST Liabilities and Equity to Total Assets (Conglomerates are excluded, for 259 firms, Percentage Share) 1,2

TL Liabilities /Total Assets 28,3% Equity /Total Assets 40,2%

Euro Liabilities / Total Asset 12,4%

USD Liabilities / Total Assets 18,8%

Other FX Liabilities/ Total Assets 0,2% Source: FINNET, Public Disclosure Platform (1) Including data for 259 non-financial corporations listed on BIST. (2) Non- financial companies using FX fonctional currency, financial institutions and conglomerates are excluded from this sample.

Last Observation: December .2016.

73


Financial Markets Developments

74


Average Funding Cost of CBRT

Outstanding Value (Billion TL)

CBRT Average Fund Rate (Right Axis, Percent)

140

14

120

12

100

10

80

8

60

6

40

4

20

2

0

0

Source: CBRT.

Last Observation: 05 July 2017.

75


BIST Repo-Reverse Repo Overnight Market Rates (Percent) Interest Rate Corridor

Repo-Reverse Repo Market Overnight Rates (5 Day MA)

14

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

Source: BIST, CBRT.

Last Observation: 05 July 2017.

76


CBRT Rates and BIST Overnight Rates (Percent) Interest Rate Corridor One Week Repo Rate LLW Lending Rate

CBRT Average Funding Cost (5 day MA) Interbank Overnight Repo Rates_Closing (5 day MA)

16

16

14

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

Source: CBRT.

Last Observation: 05 July 2017.

77


Turkish Lira and Emerging Market Currencies (01.11.2011=1, values vis-a-vis USD) 2,2

Turkey

Average of Emerging Economies

Turkey/Emerging Countries

2,2

2,1

2,1

2,0

2,0

1,9

1,9

1,8

1,8

1,7

1,7

1,6

1,6

1,5

1,5

1,4

1,4

1,3

1,3

1,2

1,2

1,1

1,1

1,0

1,0

0,9

0,9

Source: Bloomberg, CBRT.

Emerging market currencies include Brazil, Chile, Colombia, Hungary, Malaysia, Mexico, Poland, Philippines, South Africa, Indonesia, Romania against USD.

Last Observation: 05 July 2017.

78


Implied FX Volatility (1 month) 35

35

30 Emerging Countries

30

Turkey

25

25

20

20

15

15

10

10

5

5

0

0

Source: Bloomberg.

Emerging market currencies include Brazil, Chile, Colombia, Hungary, Malaysia, Mexico, Poland, Philippines, South Africa, Indonesia, Romania against USD.

Last Observation: 05 July 2017.

79


Implied FX Volatility (12 months) 30

30

Emerging Countries

Turkey

25

25

20

20

15

15

10

10

5

5

Source: Bloomberg.

Emerging market currencies include Brazil, Chile, Colombia, Hungary, Malaysia, Mexico, Poland, Philippines, South Africa, Indonesia, Romania against USD.

Last Observation: 05 July 2017.

80


Currency Basket and EMBI

4,3

Currency Basket

EMBI+ Turkey (right axis)

500

4,1 3,9

450

3,7 3,5

400

3,3 3,1 2,9

350

300

2,7 2,5

250

2,3 2,1

200

1,9 1,7

Source: Bloomberg, CBRT.

150

Last Observation: 05 July 2017.

81


EMBI

EMBI Europe

EMBI Turkey

EMBI Latin America

EMBI Asia

800

800

700

700

600

600

500

500

400

400

300

300

200

200

100

100

Source: Bloomberg.

Last Observation: 05 July 2017.

82


Relative EMBI (03.01.2012=1) EMBI Europe

EMBI Latin America

EMBI Asia

EMBI Turkey

1,7

1,7

1,6

1,6

1,5

1,5

1,4

1,4

1,3

1,3

1,2

1,2

1,1

1,1

1,0

1,0

0,9

0,9

0,8

0,8

0,7

0,7

0,6

0,6

0,5

0,5

0,4

0,4

Source: Bloomberg.

Last Observation: 05 July 2017.

83


Yields Across Maturities (Percent) 0.5 year

1 year

2 year

4 year

10 year

13

13

12

12

11

11

10

10

9

9

8

8

7

7

6

6

5

5

4

4

Source: Bloomberg.

Last Observation: 05 July 2017.

84


Economic Activity Developments

85


Annual GDP Growth (Percentage) 15

15

10

10

5

5

0

0

-5

-5

-10

-10

-15

-15

-20

-20

Source: TURKSTAT.

Last Observation: 2017 Q1.

86


GDP (Seasonally Adjusted, 2009=100)

160

140

120

100

80

60

Source: TURKSTAT, CBRT.

Last Observation: 2017 Q1.

87


Final Domestic Demand and Imports (Seasonally Adjusted, 2009=100) 180

Final Domestic Demand*

Imports of Goods and Services

160

140

120

100

80

60

40

Source: TURKSTAT, CBRT.

Last Observation: 2017 Q1. * Final domestic demand approximately calculated by CBRT.

88


Imports and Exports (Seasonally adjusted, 2009=100) Exports of Goods and Services

Imports of Goods and Services

180

160

140

120

100

80

60

40

Source: TURKSTAT, CBRT.

Last Observation: 2017 Q1.

89


Quarterly Growth of GDP (Seasonally Adjusted, Percentage) 8

6

4

2

0

-2

-4

-6

Source: TURKSTAT, CBRT.

Last Observation: 2017 Q1.

90


Industrial Production Index (Seasonally Adjusted, Quarterly Average, 2010=100) 140

140

130

130

120

120

110

110

100

100

90

90

80

80

Source: TURKSTAT.

Last Observation: May 2017.

91


Import Quantity Index (Seasonally Adjusted, Quarterly Average, 2010=100) 140

140

130

130

120

120

110

110

100

100

90

90

80

80

70

70

Source: TURKSTAT, CBRT.

Last Observation: April 2017.

92


Capital Goods Production and Imports (Seasonally Adjusted, Quarterly Average, 2010=100) Capital Goods Imports 140

130

Capital Goods Production (rhs) 180,0

160,0

120 140,0 110

120,0 100 100,0 90

80

70

Source: TURKSTAT, CBRT.

80,0

60,0

Last Observation: For Production May 2017. For Imports April 2017.

93


Intermediate Goods Production and Imports (Seasonally Adjusted, Quarterly Average, 2010=100) Intermediate Goods Imports 155

145

Intermediate Goods Production (rhs) 130,0 125,0 120,0

135 115,0 125

115

105

110,0 105,0 100,0 95,0

95 90,0 85

75

Source: TURKSTAT, CBRT.

85,0 80,0

Last Observation: For Production May 2017. For Imports April 2017.

94


Consumption Goods Production and Imports (Seasonally Adjusted, Quarterly Average, 2010=100) Consumption Goods Imports 130

Consumption Goods Production (rhs) 140,0

120 130,0 110 100

120,0

90 110,0 80

70

100,0

60 90,0 50 40

Source: TURKSTAT, CBRT.

80,0

Last Observation: For Production May 2017. For Imports April 2017.

95


Capacity Utilization Rate (Seasonally Adjusted, Percentage) 85

85

80

80

75

75

70

70

65

65

60

60

55

55

Source: CBRT.

Last Observation: June 2017.

96


Export and Domestic Orders Expectations Over the Next Three Months (Increase-Decrease, Seasonally adjusted) Export 40

30

Domestic 40

30

20 20

10 10 0 0 -10 -10 -20 -20

-30

Source: CBRT.

-30

-40

Last Observation: June 2017.

97


PMI (Seasonally Adjusted) 60

60

55

55

50

50

45

45

40

40

35

35

30

30

Source: Markit.

Last Observation: June 2017.

98


Real Sector Confidence Index (Seasonally Adjusted) 125

125

115

115

105

105

95

95

85

85

75

75

65

65

55

55

Source: CBRT.

Last Observation: June 2017.

99


Investment Tendency * (Increase-Decrease, Seasonally Adjusted) 40

40

30

30

20

20

10

10

0

0

-10

-10

-20

-20

-30

-30

-40

-40

-50

-50

-60

-60

Source: CBRT.

*Question number 23 from Business Tendency Survey: Compared to the last 12 months, how do you expect your fixed investment expenditure to change over the next 12 months? Last Observation: June 2017.

100


Consumer Confidence Indices

130

120

Bloomberg HT

TURKSTAT-CBRT (rhs)

120

110

110 100 100 90 90 80 80 70 70

60

50

Source: Bloomberg HT, TURKSTAT, CBRT

60

50

Last Observation: For TURKSTAT –CBRT June 2017. For Bloomberg HT June 2017.

101


Main Economic Developments July 10, 2017

Research and Monetary Policy Department


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