TRKYE Turkey: Post-Election Economic Priorities EKONOMS Blent AKSU - - PowerPoint PPT Presentation
TRKYE Turkey: Post-Election Economic Priorities EKONOMS Blent AKSU Berat ALBAYRAK, Phd Bakan Yardmcs Republic of Turkey T.C. Hazine ve Maliye Bakanl Minister of Treasury and Finance 6 Ekim 2018 October 2018 1 Strong
Bülent AKSU Bakan Yardımcısı T.C. Hazine ve Maliye Bakanlığı 6 Ekim 2018
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Berat ALBAYRAK, Phd Republic of Turkey Minister of Treasury and Finance October 2018
4,7 5,7 1924-2002 2003-2017
Strong Growth Performance
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GDP growth (avg., %) 3x increase in per capita income Significant improvement in poverty and income distribution 13th largest economy in the world with $2.2 trillion
Source: TURKSTAT, Strategy and Budget Directorate, MTF calculations
Strong Employment Generation
3 Source: TURKSTAT
12 19 2002 2013
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Total Employment (million people)
7 million new jobs 10.3 pps increase in female labor force participation Positive discrimination against women, youth and disabled
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36 157 2002 2017
Export Supports Growth
More than 4x increase in exports # of countries with an export of more than $1 billion surged from 8 to 34 # of products with an export of more than $1 billion increased from 9 to 34
Merchandise Exports (billion $)
Source: TURKSTAT
Source: BRSA, TURKSTAT 5
59 105 2002 2017
Strong Banking Sector
Asset Size of Banking Sector (% of GDP)
Significant increase in asset size of banking sector NPL ratio decreased from 17.5% to 2.9% CAR is 17.3%, above the legal and target ratios Banking sector has no open FX position.
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10,5 1,8 2002 2017
Source: MTF
General government deficit (% of GDP)
72,1 28,3 2002 2017
Gross Public Debt (% of GDP)
20 40 60 80 100 Korea Lebanon Hong Kong Malaysia Thailand Singapore China Chile Israel Poland
Czech Rep. Colombia Brazil UAE Hungary TURKEY Indonesia Mexico Russia Philippines
India Kenya Argentina Egypt Ghana Ukraine Nigeria Pakistan
Indebtedness
50 100 150 200 250 Hong Kong China Singapore Lebanon Chile Korea UAE Israel Malaysia Hungary TURKEY Philippines Czech Rep. Thailand Russia
India Poland Brazil Colombia
Ukraine Ghana Mexico Egypt Kenya Indonesia Pakistan Argentina Nigeria 20 40 60 80 100 120 140 160 Lebanon Singapore Egypt Brazil Hungary Ukraine Ghana Hong Kong India Pakistan Israel Kenya Argentina
Poland Malaysia Colombia China Korea Philippines Czech Rep. Mexico Thailand Indonesia TURKEY Chile Nigeria UAE
Russia 50 100 150 200 Singapore Hong Kong Korea Chile UAE China Thailand Brazil Czech Rep. Malaysia TURKEY Poland
Hungary Mexico Philippines Russia Argentina Ukraine Israel Indonesia Lebanon Egypt Colombia India
Ghana Nigeria Kenya Pakistan
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EM-30 Average: 36% (% of GDP, 2018Q1)
Households
(% of GDP, 2018Q1)
Non-financial Corporates
EM-30 Average: 94% (% of GDP, 2018Q1) EM-30 Average: 48%
Government
(% of GDP, 2018Q1) EM-30 Average: 32%
Financial Corporates Source: IIF
Internal and External Shocks to Our Economy
FED tapering announcement Gezi events 17-25 December judicial coup attempt May 2013 May 2013 December 2013 December 2015 FED interest rate increase 15 July coup attempt July 2016 Recent developments in relations with the USA ECB monetary tightening
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2018 2018
9 Source: TURKSTAT
29,8 7,4 11,9 2002 2013 2017
CPI (end of year, % change)
Significant improvement in inflation since 2002 Rise due to exchange rate, food and energy prices in recent period
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6,5 3 4 5 6 7 8 9 2011-Q1 Q3 2012-Q1 Q3 2013-Q1 Q3 2014-Q1 Q3 2015-Q1 Q3 2016-Q1 Q3 2017-Q1 Q3 2018-Q1
Source: TURKSTAT, CBRT
(12 month rolling, % of GDP)
Current account deficit increased due to strong domestic demand and high commodity prices Strong exports and tourism in conjunction with rebalancing will diminish current account deficit
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Balance-Discipline-Transformation 2019-2021
REPUBLIC OF TURKEY MINISTRY OF TREASURY AND FINANCE
GDP (billion dollars, current prices) GDP Growth (%) Unemployment Rate (%) Current Account Balance/GDP (%) 2018 ET 763 3.8 11.3
20.8 2019 P 795 2.3 12.1
15.9 2020 P 858 3.5 11.9
9.8 2021 P 926 5.0 10.8
6.0
Selected Main Economic Indicators
CPI (End of year Change, %)
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BALANCE-DISCIPLINE-TRANSFORMATION
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New Economy Program (NEP, 2019-21) Balance-Discipline-Transformation
Economic Balancing between 2018-2020 Fiscal Discipline accompanying economic balancing Transformation in manufacturing & exports with a ‘value-add’ perspective
3,8 2,3 3,5 5,0 2018 2019 2020 2021
GDP Growth (%)
BALANCE-DISCIPLINE-TRANSFORMATION
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11,3 12,1 11,9 10,8 2018 2019 2020 2021
Severance pay reform Flexible employment in public sector Reviewed and redesigned employment incentives Reducing informal employment Enhancing vocational training program
Unemployment Rate (%)
BALANCE-DISCIPLINE-TRANSFORMATION
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Tight Monetary Policy Strong Fiscal Discipline Financial Stability and Development Committee (FİKKO) Collective Inflation Reduction Program Product Monitoring Mechanism and National Agricultural Project Leasing contracts Inflation Target (%)
20,8 15,9 9,8 6,0 2018 2019 2020 2021
BALANCE-DISCIPLINE-TRANSFORMATION
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Savings and revenue potential of TL76 billion in 2019 Prioritization in investment projects Mega infrastructure projects with foreign financing Rearrangement PPP practices Regulation of social insurance scheme Expanding tax base and ensure tax equity Improvement program in tax process
1,9 1,8 1,9 1,7 2018 2019 2020 2021
Budget Deficit Target (% of GDP)
BALANCE-DISCIPLINE-TRANSFORMATION
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Support for sector-oriented investment projects PPP models for technology and R&D investments Structuring of Export Incentive System Diversification in export Reducing import dependency in energy Increasing quality and diversity in tourism Current Account Deficit (% of GDP)
4,7 3,3 2,7 2,6 2018 2019 2020 2021
BALANCE-DISCIPLINE-TRANSFORMATION
Unique Aspects of NEP
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Public Finance Transformation Office Measures for Banking and Real Economy Improvements in Taxation Practices Best Practices in Strategic Sectors Implementation and Monitoring
Structure
The Ministry of Treasury and Finance Teams within other ministries
Savings- and revenue- increasing initiatives will be identified Ministry level performance targets for each initiatives will be set Initiative roadmaps will be prepared and implemented
Progress against performance indicators will be monitored and reported
Operating Model Expected Impact (in 2019) BILLION TRY SAVINGS
60
BILLION TRY REVENUE INCREASE
Additional value potential is expected in following years
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Measures for Banking and Real Sector
Conducting financial health assessment studies of banking sector Implementation of a comprehensive policy set according to the results of the studies Restructuring of loans of real sector companies Restructuring of Development Bank of Turkey Restructuring of Real Estate Bank of Turkey
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Source: OECD, EUROSTAT, TURKSTAT
High Potential of Turkey
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1,6 0,5 0,1 TURKEY OECD EU-28
Working Age Population Growth* (%)
(*) 2002-17 average, 15-64 years
Dynamic and young population Geographical strategic location Large domestic market Strong infrastructure
Bülent AKSU Bakan Yardımcısı T.C. Hazine ve Maliye Bakanlığı 6 Ekim 2018
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