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Economic Outlook: Turkey & Arab World

Economic Outlook: Turkey & Arab World. Serkan ÖZCAN AGM, Economic Research & Strategy June 2012. Current Outlook for Turkey and MENA. New Stars: Turkey & MENA. Realizations and Expectations of GDP Growth Rate. Source: IMF, Odea.

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Economic Outlook: Turkey & Arab World

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  1. Economic Outlook: Turkey & Arab World Serkan ÖZCANAGM, Economic Research & StrategyJune 2012

  2. Current Outlook for Turkey and MENA

  3. New Stars: Turkey & MENA Realizations and Expectations of GDP Growth Rate Source: IMF, Odea

  4. One Factor Two Problem: Surplus in MENA, Deficit in Turkey... Gross National Savings/GDP (%) Current Account Balance/GDP (%) Source: IMF, Odea

  5. Budget surplus is expected only in MENA through high oil... Robust Fiscal Performance Source: IMF, Odea

  6. Risk premiums are improving in both MENA and Turkey... Improving Risk Premiums Source: IMF, Odea

  7. But fiscal break-even oil prices have reached to new highs... Source: IMF calculations

  8. Turkish exports to MENA doubled during 2006-12... Trade Relationship Between Turkey and MENA Region 7.9 times in exports and 4 times in importsin the last decade Source: IMF, Odea

  9. Despite recession in EU, trade volume reached record level Trade volume between Turkey and MENA reached 20%, record level as of April 2012... In the last decade, both of exports and imports increased above the growth rates of total figures. Accordingly, share of MENA’s exports in total exports increased to 28% as of April 2012 from 15% in 2003, while the share of imports from MENA was 15%... Turkish Exports to MENA (3MA, YoY Changes) Turkish Imports From MENA (3MA, YoY Changes)

  10. %11 of Turkish Private Debt Received From MENA, Through Foreign Branches and Affiliates of Local Banks... Long-term External Private Debt Stock in Turkey - Country of Creditors (As a % total debt) Source: CBRT, Odea

  11. Opportunities in Turkish Banking Sector Banking Soundness Indicators (%, latest available month for 2011) • Strongly capitalized and regulated banking sector… • Lower NPL ratio... GDP per capita (PPP, US$) • Nominal GDP increased by almost 3.7 times during 2002-2011 and is expected to grow by 1.5 times in the next 5 years. • Moreover, GDP per capita in Turkey is almost 2 times of total emerging markets’. 2X of EMs Source: IMF, IIF, Odea

  12. What are the advantages of Turkey stock markets for Arab Investors?

  13. Huge Potential, High Profits... Funds Raised through Istanbul Stock Exchange (ISE) During 2000 to March 2012: IPO&Right Issues US$ 37.1 billion Cash Dividend US$ 40.9 billion Source: ISE, Odea

  14. Market value/GDP ratio is expected to increase by 1.5 times in the next five years with the project of Istanbul Finance Center... Istanbul Stock Exchange (ISE) Market Value Source: ISE, Odea F: ISE forecast

  15. Risks

  16. Recent sharp fall in oil prices to signal to downside risks... There is a significant downward risks due to the recent sharp fall in oil prices... Oil prices declined significantly by 25% in the past quarter due to the rise in downside risks regarding global economic activity and risk aversion in financial markets. The recent sharp fall in oil prices led to downward risks on growth rate in the remainder of the year, especially for MENA’s oil exporters. Oil Prices & Share of MENA Economies in World Oil Prices & Share of Turkish Economy in World

  17. Is Risk Scenario Becoming New Base? The Effects of an Euro Area Crisis (Difference from IMF growth forecasts*) Source: IMF, Odea * Peak deviation of output from the IMF April baseline under the downside scenario, increased bank and sovereign stress in the Eurozone.

  18. Conclusion

  19. A SWOT Analysis for Relationship of Turkey and Arab World Source: CBRT, Odea

  20. Thank you for your attention... Serkan ÖZCANAGM, Economic Research & Strategy Serkan.Ozcan@OdeaBank.com.trJune 2012

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