Page 26 - A&T BANK ANNUAL REPORT 2012

GENERAL INFORMATION
CORPORATE MANAGEMENT
FINANCIAL INFORMATION
2012 PERFORMANCE OF TURKEY’S ECONOMY
Despite the adversities and uncertainties of the global
economy, Turkey achieved an extremely difficult objective
by taking determined steps towards establishing greater
economic stability. Indeed, the economy’s soft landing was
achieved together with improvement in the balance of
payments which was a serious risk factor. In 2013, economic
growth is expected to be stronger than that of 2012. However,
the current account deficit will also be higher than in the
previous year due to faster growth. And unless the recession
in the EuroZone turns into a double dip, the Turkish economy
is expected to grow by 4% or even slightly higher in 2013.
By virtue of strong financial flows, improved confidence,
and supportive fiscal and money policies, Turkey continues
to be the fastest growing economy when compared to EU
countries.
Factors that reduced Turkey’s economic vulnerability include
the shift towards new foreign markets, the measures
implemented by monetary authorities to strike a balance
between external and domestic demand and shrinkage in
the current account deficit. Furthermore, the rise in global
liquidity, domestic interest rates falling from 11% to 6%
and Fitch’s upgrade of Turkey’s credit rating to investment
As a result increasing foreign trade and rising domestic
demand, Turkey’s economy achieves healthy growth
despite global volatility in 2012.
grade all contributed to considerable optimism in domestic
markets, especially in the second half of the year. According
to the Medium Term Plan of the Ministry of Finance, including
revisions for 2012 as well as three-year macro forecasts,
the Turkish economy is expected to grow by 3% in 2012
and 4% in 2013. Within this framework, it is presumed that
the balance between domestic and external demand, the
driving force of economic growth, will be maintained, with a
greater contribution of net exports to growth throughout the
forthcoming period.
Stagnation in EU countries has led to diversification of export
markets, whereby the contribution of net exports to growth
turned positive by virtue of those sectors that export to non-
European countries. In 2012, export volume rose by 13.1%,
while imports declined by 1.8%. Thus, the export-import
coverage ratio rose to 64.8% compared to 56% in 2011.
Despite uncertainties in the global economy, Turkey
sustained its positive performance without compromising
on budget discipline which demonstrated a significant
contribution to this solid performance.