Turkey: Recent Developments and Future Prospects

ISBANK Economic Research Division January 2018

Macroeconomic Outlook

Strong Economic Growth Cycle

GDP of 863 bn USD (2016), 10.9k USD (2016) per capita

Average GDP growth rate of 5.6% between 2004-2016 17th largest economy in the world & 6th largest economy amongst the EU countries 8 mn job creation since 2006

Improved CAD/GDP ratio down to 3.8% in 2016

Prudent fiscal policy since 2002

3

Gross Domestic Product  Turkey’s GDP came in at 863 billion USD in 2016.

GDP

Per capita GDP

(billion USD)

2004

2008

2010

2012

2014

2016

2004

4

2006

2008

2010

2012

2014

10,883

11,019

12,112

12,480

11,588

11,205

10,560

8,980

7,906

7,304

5,961 2006

10,931

9,656

863

862

935

871

832

772 647

548

403

500

677

777

950

(USD)

2016

Source: Turkstat

Economic Growth  Private consumption spending, investments and net exports contributed positively to growth. Real GDP Growth

Contributions to Growth

(%)

(2009=100 chain linked volume index % points)

8.5

10

7.4

8 6

6.1

5.2

4

0.9

3.2

4.8

5.0

7.1

8.5

9.0

11.1

12

2 0

-4.7

-2 Stock Change Investment GDP

-4

-6 2005

2007

2009

2011

2013

2015

2017 9M

5

2014

2015

Net Exports Consumption 2016

2017

Source: Turkstat

Leading Indicators  Economic activity has gained momentum in 2017.

Calendar Adjusted Industrial Production (yoy, % change)

Confidence Indices

20

120

15

110

10

7.2*

100

5 90

0 -5

80

Real sector confidence index Economic confidence index Consumer confidence index

-10 70

-15 -20

60

-25 Q1 2007

Q3 2008

Q1 2010

Q3 2011

Q1 2013

Q3 2014

Q1 2016

50 Dec-13 Aug-14 Apr-15 Dec-15 Aug-16 Apr-17 Dec-17

Q3 2017

(*) As of October-November Source: Turkstat, Datastream

6

Labor Market  8 million new jobs were created since 2006.

Labor Market Indicators*

Employment*

(%)

(millions)

Unemployment 52 53 51 52

Labor Participation Rate 49 49 47 47 47 45 45 44 45 12.0 11.9

12.0 10.0

9.7

2005

8.9 9.2

2007

23 23

8.5

2009

2011

20 20 20

10.3 10.2

10.3

2015

2017

20

24 25

27 26 27

29

2015

2017

21

8.8 9.1

2013

2005

2007

2009

2011

2013

(*) Seasonally adjusted figures. Latest figure as of October 2017.

7

Source: Turkstat, Datastream

Fiscal Discipline  Fiscal discipline has been the main pillar of economic policy.

Budget Deficit

General Government Debt Stock

(% GDP)

(% GDP)

Maastricht criterion: 3%

Maastricht criterion: 60%

1.9

1.9 1.5 1.0

1.1

1.0

1.1

32.6

31.3 28.6

2012

2013

2014

2015

2016

2017F* 2018F**

2012

2013

2014

27.5

28.1

2015

2016

28.5

30.0

2017F* 2018F**

(*) Isbank Economic Research Division forecasts (**) Medium Term Program forecasts

8

Source: Turkstat, Treasury, Ministry of Development

Exports  Exports doubled since 2005.

Exports*

Exports*

(billion USD)

(% of total)

156 143

144

158

152

114

102

Knitted and crocheted goods Iron and steel

73

Electrical machinery and equipment

Articles of iron and steel Plastic and articles Minerals and fuels

2007

2009

2011

2013

2015

8.7

Precious stones

Non knitted and crocheted goods

2005

15.3

Boilers and machineries

86

107

132

135

152

Motor Vehicles

2017

7.2 5.6 5.2 5.1 3.8 3.5 3.5 2.8

(*) 12-month cumulative figures as of November 2017.

9

Source: Turkstat

Exports  Turkey has been successful in diversifying export markets. Top 10 export markets 2004

% of total

2017*

Exports* (% of total)

% of total

1. Germany

13.8

1. Germany

9.6

2. UK

8.8

2. UAE

6.2

3. US

7.7

3. UK

6.1

4. Italy

7.4

4. Iraq

5.8

5. France

5.8

5. US

5.5

6. Spain

4.1

6. Italy

5.4

7. Netherlands

3.4

7. France

4.2

8. Russia

2.9

8. Spain

4.0

9. Iraq

2.9

9. Netherlands

2.4

56.5

EU

46.8

Near and Middle East

22.9

13.9

10. Israel The share of first 10

2.1

10. Israel

2.2

58.9

The share of first 10

51.4

2005

2007

2009

2011

2013

2015

2017

(*) 12-month cumulative figures as of November 2017.

10

Source: Turkstat

Imports  Import volume exceeded 220 billion USD.

Imports*

Imports*

(billion USD)

(% of total) Minerals and Fuels

15.8

199

229

242

252

237

207

7.5

Precious Stones

7.5

Iron and steel

117

140

9.0

Motor Vehicles

7.1

Plastic and articles

2007

2009

2011

2013

2015

2017

5.7

Organic chemicals

2.3

Optical products

2.2

Pharmaceutical products

2005

11.7

Electrical machinery and equipment

141

170

186

202

241

Boilers and machineries

1.9

(*) 12-month cumulative figures as of November 2017.

11

Source: Turkstat

Imports  Almost 30% of imports are from China, Germany and Russia. Top 10 import markets 2004

% of total

2017*

Composition of Imports (%)

% of total

1. Germany

12.8

1. China

10.1

2. Russia

9.3

2. Germany

9.1

3. Italy

7.0

3. Russia

8.3

4. France

6.4

4. USA

5.1

5. USA

4.9

5. Italy

4.9

6. China

4.6

6. France

3.5

7. UK

4.4

7. Iran

3.3

8. Switzerland

3.5

8. Switzerland

2.9

9. Spain

3.3

9. South Korea

2.8

Capital Goods

10. Japan

2.8

10. UK

2.8

Intermediate Goods

52.6

Consumption Goods

12.4

The share of first 10

58.9

The share of first 10

2017*

2004 17.8

69.3

12.2

14.2

73.3

(*) 12-month cumulative figures as of November 2017.

12

Source: Turkstat

Tourism  Tourism sector showed signs of improvement.

The Number of Tourists (million persons)

Tourism Revenues (USD bn) Russia 30 28 25 25

27 Iran

1.7 1.7

22

19

19 Bulgaria UK Ukraine Iraq Netherlands

2007

2009

2011

2013

2015

Nov 17*

Azerbaijan

5.6

2.4

2.4 2.2 1.9 1.8 1.7 1.8 1.7 1.7 2.5

Georgia

17

2005

3.6 3.6 3.9

Germany

23 23 23 19

4.7

0.9

Nov 2017* 2016 2015

1.3 1.0

0.7 0.9 0.4 1.1 0.8 0.9 1.2 0.8 0.6 0.6

Total tourist numbers 2015: 36.2 mn 2016: 25.3 mn 2017 Nov.*: 32 mn

(*) 12-month cumulative

13

Source: CBRT, Ministry of Culture and Tourism

Savings & Investments  Saving-investment gap of Turkey…

Investments and Savings (% of GDP) 31.3 29.8 28.3

27.0

29.0

28.3

29.6 Saving Gap

23.0

21.4

21.3

22.5

22.8

23.2

24.4

24.8

25.0

Savings

8.8 5.7

5.5

6.6 4.6

3.6

4.6

Investments

1.7 2009

2010

2011

2012

2013

14

2014

2015

2016 Source: Turkstat

Current Account Balance  Current account deficit to GDP ratio came in at 3.8% in 2016. Current Account Deficit

Financing of CAD

(% of GDP)

(12-month cumulative, billion USD) 100 80

8.9

60 Nov: 43.8

6.7 5.7

5.5

5.8

40

5.5

20

5.1 4.7

4.2 3.7 3.8

3.5

0 -20

1.8

-40

2004

2006

2008

2010

2012

2014

2016

-60 2011

Foreign Direct and Long Term Investments* Portfolio and Short Term Investments** Current Account Deficit 2012

2013

2014

2015

2016

2017

(*) 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 credits and deposits in banks. Source: Turkstat, CBRT 15

Capital Flows  Improvement in capital flows to Turkey....

Portfolio Inflows

Foreign Direct Investment Inflows

(12-month cumulative, billion USD)

(12- month cumulative, billion USD)

Debt Securities Equity Securities Binler

25 20

18 16 14

15

12

10

10 5 8 0

6

-5

4

-10

2

-15 Nov.15

0 Nov.15

May.16

Nov.16

May.17

Nov.17

16

May.16

Nov.16

May.17

Nov.17

Source: CBRT

Monetary Policy  Central Bank has implemented tight liquidity policy.

Annual CPI Inflation

Interest Rates

(%)

(%)

14 13

13

12

Interest Rate Corridor One Week Repo Rate CBRT Weighted Average Cost of Funding Late Liquidity Window

12 Dec. 11.92

11

11

10 10 9

9

8 7

8

6

7

5 2012

2013

2014

2015

2016

6 Dec.16

2017

17

Mar.17

Jun.17

Sep.17

Dec.17

Source: Datastream, Turkstat, CBRT

Financial Markets  Emerging market currencies have recovered in the last month of the year.

Nominal depreciation in local currency

USD vs Local Currencies

Equity Indices

(Dec. 31, 2016 = 100) 120

(Dec. 31, 2016 = 100) 160

Turkey

Turkey

Brazil

Brazil

Russia 110

140

Russia

Indonesia

Indonesia

South Africa

South Africa 120

100 100

90 Jan.17 Mar.17 May.17 Jul.17

Sep.17 Nov.17 Jan.18

80 Jan.17 Mar.17 May.17 Jul.17

Sep.17 Nov.17 Jan.18

Latest figure: As of January 11, 2018

18

Source: Datastream

Financial Markets  Risk premiums of emerging markets…

5Y Government Bond Yields

5Y CDS Spreads

(%)

(bps)

Turkey

300

Brazil 13

Russia

Turkey Brazil Russia

Indonesia 250

South Africa

Indonesia South Africa

11 200

9 150

7

100

5 Jan.17 Mar.17 May.17 Jul.17 Sep.17 Nov.17 Jan.18

50 Jan.17 Mar.17 May.17 Jul.17

Sep.17 Nov.17 Jan.18

Latest figure: As of January 11, 2018

19

Source: Datastream

Banking Sector Dynamics

Banking Sector Dynamics

Increased intermediation activity by financing the growth of Turkish economy Diversification of funding sources by increasing access to international markets Shifting focus from growth to asset quality and stable funding structure

Strengthened asset quality confirmed by low NPL ratios

High capital adequacy ratio

Strong growth potential

21

Basic Indicators  Increase in foreign bank presence…

Share in Total Assets

Number of Banks*

(%)

Public Foreign Domestic Private 48

49

36

38

Public 3

27 25

Foreign

15

Domestic Private

13

28

58 36

9

8

2004

Nov-17

2004

Nov-17

(*) Excluding the banks under the administration of the SDIF

22

Source: BRSA

Basic Indicators  Branch network and the number of staff in the banking sector…

2005

2007

2009

2011

2013

2015

Nov-17

23

2005

2007

2009

2011

2013

2015

207,963

210,136

216,722

216,063

213,431

200,745

194,617

190,586

183,614

182,100

167,212

150,462

138,169

11,556

Number of Domestic Personnel

11,664

12,185

12,125

11,903

10,981

10,440

10,000

9,526

9,250

8,071

7,256

6,521

Number of Domestic Branches

Nov-17

Source: BRSA

Basic Indicators  Strong growth performance in the banking sector… 57

Nominal GDP Growth (%)

50 Loan Growth (%)

40 34

30

32

30

29

18

20

15

13

14

2013

2014

2015

16

23 17

2004

2005

17

2006

12

13

2007

2008

7

17

20

16

13

0 2009

24

2010

2011

2012

18 12 2016 2017 9M

GDP

Assets

Loans

Deposits

Equity

(bn USD)

(bn USD)

(bn USD)

(bn USD)

(bn USD)

X2.1

2004

X7.6

X3.8

403

2004

462

X2.8

X3.2

143

228 2017 9M

563

862

844

97

34

74 2017 9M

2004

2017 9M

24

2004

2017 9M

2004

2017 9M

Source: BRSA, Turkstat

Balance Sheet Items  Increasing financial intermediation role of banks…

12 15

Asset Composition

Liability Composition

(%)

(%) 9 15 12

Other Assets

11

Cash+Banks

18

Shareholder's Equity

15 0 11

Securities Loans

Other Liabilities

11

5

Securities Issued

15

Banks

40

Deposits

64

62 52

32

2004

2004

Nov-17

25

Nov-17

Source: BRSA

Deposits  Deposits have been the main funding source of the banking sector. Deposit Volume

Share of TL Deposits in Total

(annual % change)

(%)

30

70

25

68

20

66 64

15

62

10

60 5 58 0 -5

56

TL Deposits

54.3 54

FX Deposits in USD Terms -10

52

Total Deposits (exchange rate adjusted) -15 2013

2014

2015

2016

50 2013

2017

2014

2015

2016

2017

Latest figure: As of December 29, 2017 Source: BRSA

26

Loans  Loan growth picked up pace since the fourth quarter of 2016. Loan Volume

Share of TL Loans in Total

(annual % change)

(%) 76

30

74

25

72 20 70 15 68 10

67.0

66 TL Loans

5

64

FX Loans in USD Terms Total Loans (exchange rate adjusted)

0 2013

2014

2015

2016

62 2013

2017

2014

2015

2016

2017

Latest figure: As of December 29, 2017 Source: BRSA

27

Non-Performing Loans  NPL ratio has remained at low level.

NPL Ratio

Non-Performing Loan Ratio

(%, 2016)

2005

2007

2009

2011

2013

2015

2.9

3.2

3.1

2.8

2.7

2.9

2.7

3.7

3.7

3.5

3.7

4.7

5.3

(%)

Nov-17

28

Greece S. Cyprus Portugal Italy Slovenia Ireland Bulgaria Hungary Romania Poland Spain Austria EU Average Malta France Turkey Belgium Latvia Denmark Germany Netherlands UK Norway Finland Luxembourg Sweden

45.9 44.8 19.5 15.3 14.4 13.6 12.5 11.5 10.1 6.1 5.7 5.3 5.1 4.4 3.7 3.2 3.2 3.2 3.1 2.5 2.5 1.9 1.9 1.6 1.1 1.0

Source: BRSA, EBA

Loans by Sectors  Manufacturing industry has the highest share in total loans. Loans by Sectors (% share, as of November 2017) Manufacturing industry

18.1

Wholesale trade

9.3

Construction

8.8

Electricity, Gas and Water Resources

6.6

Transportation, Storage and Communication

5.0

Retail trade

4.1

Agriculture

3.9

Research, Consulting, Advertising etc.

3.3

Textile and textile products

3.2

Tourism

3.0

Main Metal Industry

3.0

29

Source: BRSA

Non-Performing Loans by Sectors  Non-performing loans ratio by sectors… NPL Ratio (%, as of November 2017) Wholesale trade

4.4

Retail trade

3.6

Construction

3.4

Textile and textile products

3.4

Manufacturing industry

3.3

Main Metal Industry

3.1

Agriculture

2.7

Tourism

2.6

Transportation, Storage and Communication

1.8

Research, Consulting, Advertising etc. Electricity, Gas and Water Resources

1.0 0.4

30

Source: BRSA

Net FX Position of NFCs  Short-term FX risks have been managed carefully by the non-financial sector. Net FX Position of the Non-Financial Sector (bn USD)

2009

2010

2011

10.3

10.1

-3.8

2012

2013

2014

-0.8

-3.6

1.1

2015

2016

Oct2017

5.2

1.3

7.4 Long Term Net FX Position

-77 -99 -114

-136 -168

-67

-180

-195

-89

-207

Short Term Net FX Position

-219

-118 -136 -171

Net FX Position

-179 -190

31

-206

-212

Source: CBRT

FX Assets & Liabilities of NFCs  Majority of FX loans of non-financial companies were raised from domestic banks. FX Liabilities of NFCs (bn USD) 28 18

15

15

88

81

48

50

2008

2009

76

20 78

22

82

28

30

82

86

33 94

40

Import Payables

103 External Loans

81 Domestic Loans

82

102

122

2010

2011

2012

155

172

174

178

184

2013

2014

2015

2016

Oct-2017

FX Assets of NFCs (bn USD) 20 11 9

60

2008

13 9

13 11

16 11

22

18

19

12

12

16 12

17 13

12

64

67

69

68

2013

2014

2015

2016

57

62

55

61

2009

2010

2011

2012

15

Direct Investment Abroad Export Receivables

32

79 Deposits

Oct-2017 Source: CBRT

Public - Private Partnership Projects  A total of 197 PPI projects, worth of 130.4 billion USD, have been completed / under construction since 2006.

Annual Infrastructure Investment Amounts and Sectoral Distribution of Projects Contracted since 2006 (bn USD)

33

Sectoral Distribution of Total Infrastructure Investment Amount (2006-15, bn USD)

Source: CBRT

Short Term External Debt Stock  Turkey’s external financing needs in the coming 12 months…

October 2017 (*)

12-Month Long-Term Debt Roll Over Ratio (%)

(bn USD) Share (%) Central Bank

0.7

0.4

General Government

6.9

4.0

Banks

96.5

55.7

Credits

51.7

29.8

FX Deposits

15.1

8.7

Bank Accounts

18.1

10.4

9.2

5.3

11.6

6.7

5.1

3.0

69.3

40.0

Trade Credits

43.4

25.0

Other Credits

25.9

15.0

Public

0.3

0.2

Private

25.7

14.8

173.4

100.0

Branches and Affiliates Abroad

TRY Deposits Branches and Affiliates Abroad Other Sectors

Total

Banking Sector Non-banking Sector

198

332

188 149

111119

2012

147

126 108

101

2013

2014

2015

96 107

2016 Nov-2017

(*) External debt maturing within 1 year or less regardless of the original maturity.

34

Source: CBRT

Breakdown of FX Loans  In line with strict regulations, FX liabilities belong mostly to large-scale corporates that generate or have potential to generate FX revenues.

Firm Size Breakdown of Domestic FX Corporate Loans (% share)

Breakdown of Corporate FX Loans by Amounts (% share, # of companies)

Large (Rha)

Medium Small Micro

Not: Loans extended abroad and used via the intermediacy of domestic banks are included. Source: CBRT

35

Non-Deposit Sources  Banks have diversified their funding sources. Net FX Position*

External Borrowings of the Banks

(billion USD)

(outstanding amount, billion USD) Eurobonds

60.0

Syndication Loans

Securitization Loans Double Investment Grade (May 2013-Sep.2016)

40.0

27.3

21.0

20.0

0.0 12.3

-20.0

-40.0 Net -60.0 2005

2007

On Balance 2009

2011

2013

Off Balance 2015

2005

2017

2007

2009

2011

2013

2015 Nov-17

(*) Latest figure: As of December 29, 2017 Source: BRSA

36

Capital Adequacy Ratio  Turkish banks continued to be very well capitalized.

Capital Adequacy Ratio

Capital Adequacy Ratio

(%, 2016)

(%) Netherlands Ireland Latvia Croatia Bulgaria Slovenia Slovakia Germany EU Average Belgium Czech Rep. Malta France Austria Greece Hungary Poland S. Cyprus Turkey Spain Italy Portugal

23.7 21.9 20.6 19.0 17.9 18.9

16.3

18.0

16.4

15.6

16.6 15.6

15.3 Target Rate of 12%

Legal Limit of 8%

2005

2007

2009

2011

2013

2015

Nov-17

22.7 21.1 20.8 20.4 20.3 19.6 19.2 18.7 18.5 18.4 18.3 17.7 17.7 17.6 17.1 16.3 16.1 15.9 15.6 14.6 13.7 11.0

Source: BRSA, EBA

37

Alternative Banking Channels  A promising innovative future for mobile banking in Turkey… Internet Banking

Mobile Banking

(number of active customers, thousand persons)

(number of active customers, thousand persons)

12,783

26,536

X1.8

X115.2

7,227

230 2011 Q1

2017 Q3

2011 Q1

38

2017 Q3

Source: The Banks Association of Turkey

Profitability  Net interest margin has been close to 4%. NIM*

Cost / Income Ratio

5.4% 4.7% 45%

4.3%

44% 41%

4.1% 3.7% 3.5%

3.5% 3.5%

3.6%

3.8%**

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (*) Net interest income / average total assets (**) 12-month cumulative as of November 2017 (***) As of January-November 2017 Source: BRSA

43%

41%

45% 46% 40%

38%***

36%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

39

Profitability  Profitable banking sector...

ROAE

ROAA

2.6% 2.5%

23% 20%

2.0% 1.7%

19%

1.8% 1.7%*

1.6%

15% 16%

1.5% 1.3%

16%* 14%

14% 12%

1.2%

11%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (*) Annualized as of November.

40

Source: BRSA

Stock Exchange Performance  Stock market continues to make all time-highs.

Stock Exchange Performance 130

200

120

Binler

(thousands)

180 110 160

100 90

140

80 120

70 60

100

50

BIST-100 Index

Banking Sector Index (right axis)

80

40 30 2013

60 2014

2015

2016

2017

2018

Latest figure: As of January 11, 2018

41

Source: Datastream

Banking Sector Comparison  Despite the fast growth in the sector, penetration ratios are still low.

Banking Sector’s Comparison with European Union (2016)

Banking Sector’s Assets in Turkey (% GDP)

105

101

98

105

87

87

87

291 Assets/GDP

66

66

63

159

Loans/GDP

53

60

74

83

96

(%, 2015)

27 Housing Loans/GDP

6

EU-28 148

Turkey

Deposits/GDP 56 2004

2006

2008

2010

2012

2014

2016

42

Source: BRSA, Turkstat, ECB, Eurostat

Banking Sector Comparison  Strong and underpenetrated banking market relative to peers Assets / GDP France Netherlands EU-28 Sweden Belgium Germany Spain Italy Portugal Greece Czech Rep. Croatia Bulgaria Turkey Hungary Slovenia Poland Slovakia

Loans / GDP 374% 351%

France Netherlands Sweden EU-28 Germany Spain Italy Belgium Portugal Greece Croatia Czech Rep. Bulgaria Slovenia Turkey Poland Slovakia Hungary

291% 283% 261% 248% 244% 235% 232% 200% 127% 127% 107% 105% 104% 99% 96% 90%

Loans / Deposits Sweden Netherlands Turkey France Czech Rep. EU-28 Croatia Poland Germany Greece Italy Bulgaria Slovakia Slovenia Belgium Portugal Spain Hungary

206% 198% 167% 159% 149% 146% 145% 133% 131% 119% 91% 84% 72% 67% 66% 65% 63% 55%

Deposits / GDP 169%

France Spain Netherlands Portugal Belgium Italy EU-28 Germany Greece Sweden Croatia Czech Rep. Bulgaria Slovenia Slovakia Hungary Poland Turkey

122% 119% 113% 109% 107% 106% 102% 102% 98% 98% 95% 95% 92% 88% 87% 87% 84%

43

182% 169% 162% 151% 150% 149% 148% 147% 121% 99% 86% 77% 76% 73% 67% 66% 64% 56%

Source: BRSA, EBF Figures as of 2016

Future Prospects

Future Prospects inherited assets and achievements provide sufficient cushion for Turkey

geographical location young population high external financing needs

dynamic private sector

geopolitical tensions

sound fiscal picture strong banking sector comprehensive structural reform agenda

main challenges should be addressed carefully 45

Structural Reform Agenda  The transformation programs should be implemented by reprioritizing them.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

11. 12. 13.

Productivity growth in production 14. Reducing dependence on imports 15. Increasing domestic savings at the national level 16. and preventing wastefulness 17. Istanbul international financial center 18. Rationalization of public expenditures 19. Raising the quality of public revenue 20. Improving the business and investment climate Improving the effectiveness of the labor market 21. Reducing the informal economy 22. Development of the statistical information infrastructure 23. Commercialization of priority technology areas Technology development and local production 24. through better public procurement 25. Energy generation based on local resources

46

Energy efficiency improvement Effective use of water in agriculture Structural transformation in healthcare industries Improvement in health tourism Transition from transportation to logistics Development of basic and occupational skills Attracting qualified human resources from abroad Healthy life and mobility Preserving the family and dynamic population structure Institutional capacity development at the local level Urban redevelopment program to increase competitiveness and social cohesion Improving international cooperation infrastructure for development

Source: Ministry of Development

ISBANK Forecasts

2017

2018

Real GDP Growth (%)

6.7

4.1

Current Account Deficit (% of GDP)

5.2

5.1

11.9(R)

10.2

105.4

104.0

CPI (%)

Banking Sector Total Assets (% of GDP) R: Realization

47

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