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Recovery from the global economic crisis was stronger and faster than expected in 2009.
Following the world-wide recession that grew deeper after the last quarter of 2008, the global economic crisis was mostly left behind thanks to the monetary and fiscal measures taken by G-20 countries as well as the IMF's activist policies and its support for the world’s problematic economies.

The signs of recovery became clearer as of the second half of 2009.

Even though the global economy will be slow in 2010, it will return to its path of growth.
After the contraction of 0.9% in 2009, the global economy is expected to grow at a rate of 3.6% in 2010. However, estimates predict that the recovery in economic activity will be uneven among country groups and may take longer for some countries.

Global economic growth is forecast to be slow due to weakness in credit demand conditions and high unemployment because of the conclusion of fiscal and monetary stimulus measures in the US and the EU. Half of the world’s economic growth will originate from Asian countries and especially China, with Japan as the exception. Developing countries are expected to lead in global economic growth in 2010-2012 for nearly three quarters.

Deflationary pressure in developed economies and inflationary pressure in developing economies are the likely results with unbalanced economic activity globally.

Signs of recovery in GDP started to emerge in Turkey in the second half of 2009.
Contracting at a rate of 4.6% in the last quarter of 2008 and 7.6% in the first quarter of 2009, Turkey’s GDP started to show signs of recovery in the second half of the year due to the stimulating effects of temporary tax relief after contraction for four consecutive quarters.

A more moderate recovery began in economic activity in the third quarter. It is estimated that GDP declined a total of 5.8% in 2009. For 2010, forecasts predict that GDP will grow at an annual rate of nearly 5% thanks to restocking of inventory and recovery after the contraction in 2009.

Chart: GDP growth (in constant prices)



GDP in constant prices

Growth rate





































Source: TÜİK

Decrease in inflation continued until the last quarter of the year.
CPI inflation, which was 10.06% at the end of 2008, declined to 5.08% by October 2009 due to weak demand, a decrease in global commodity prices and temporary tax breaks. By the end of 2009, CPI increased 6.53% because of the end of the temporary tax relief in the last two months of the year and the negative base effect.

Source: TÜİK

Source: TÜİK

The annual PPI inflation rate, which is more sensitive to fluctuations in global oil prices and the USD exchange rate, stood at 8.11% at end-of-year 2008. However, this indicator fell to 3.75% in July 2009 before rising to 5.93% at the end of 2009 due to the oil price swings on global markets.

Beginning in November 2008, and until November 2009, TCMB steadily lowered interest rates due to weakness in economic activity and low inflation. During this period, TCMB reduced its policy interest rate to 6.50%, a decrease of 10.25 percentage points.

Annual inflation is expected to accelerate especially in the first half of the year and complete 2010 with an approximate rate of 8% due to tax increases, a rise in global commodity prices, a negative base effect and recovery in economic activity.

Exchange rates paralleled global risk appetite while borrowing costs depended on monetary policy.
The decrease in bond interest rates continued in 2009 in parallel with TCMB's interest rate cuts and the contraction in credit demand. The benchmark bond yield, which was at 16.1% at the beginning of the year, fell to 7.7% in October and completed 2009 at 8.9%, after a period of fluctuations because of the uncertainties related to the IMF program.

The US Dollar exchange rate gained value in relation to the TRY, climbing to 1.80, an increase of approximately 20%, due to the global risk perception. Subsequently, the USD to TRY exchange rate dropped to 1.50 in parallel with the increase in risk appetite in global financial markets at the end of 2009. The decline in global energy prices continued in 2009. The average price of a barrel of oil, which was nearly USD 100 in 2008, decreased to nearly USD 60 in 2009.

With energy prices lower than in previous years and a decline in imports, a decrease in the current account deficit occurred. The current account deficit to GDP ratio, which was 5.7% in 2008, is forecast to drop to 2.3% in 2009 and reach 4% in 2010, in the scenario that the per barrel price of oil rises to USD 80.

The Turkish banking sector maintains its robustness.
Despite the worldwide economic crisis that continued to affect financial markets globally in 2009, the Turkish banking sector maintained a robust structure characterized by high capital adequacy ratios and healthy balance sheets.

The capital adequacy ratio of the Turkish banking sector, which was 18.0% at year-end 2008, reached 20.5% as of end-of-year 2009.

Total assets of the sector increased by 13.8% when compared to year-end 2008, reaching TRY 833.9 billion at end-of-year 2009. While the banking sector assets to GDP ratio was 77.1% at the end of 2008, it had risen to 85.5% by September 2009.

Total loans increased by 6.9% when compared to the end of 2008 and reached TRY 367.4 billion at year-end 2009. A significant amount of the annual increase in loans, 4.5 percentage points, took place in the last quarter of the year. The greatest increase occurred in personal loans, which rose 10.9%, followed by corporate and commercial loans at 7.9% and a rise in SME loans of 0.7%.

When compared to end-of-year 2008, the share of loans to assets decreased 3.1 percentage points but loans continued to be the biggest placement unit in the banking sector with a share of 47.1% by year-end 2009. The NPL ratio, which stood at 3.7% at end-of-year 2008, reached 5.3% as of year-end 2009. The NPL ratio was replaced by a decrease in all the segments towards the end of 2009.

In 2009, a strategy to expand the assets in the banking sector with the help of a high-income securities portfolio was widely adopted. The share of the sector's securities to total assets increased by 5 percentage points, to 31.5%, compared to year-end 2008.

The total of syndication and securitization loans, which was USD 26.3 billion in September 2008, declined to USD 18.1 billion in December 2009, a decrease of USD 8.2 billion. The renewal rate of syndication and securitization loans was 56.89% in 2009.

The banking sector in 2009

Total assets

TRY 833.9 billion


TRY 392.6 billion

Marketable securities

TRY 262.9 billion


TRY 514.6 billion

Current period net income

TRY 20.2 billion

Source: Banking Regulation and Supervision Agency, February 2010 monthly interactive bulletin,