I strongly recommend that you read these boxes, which will soon be published on our website. Distinguished Guests, I would like to commence my speech by reviewing the global economic outlook given its undeniable influence on our policies. In the third quarter of the year, the uncertainty over advanced country monetary policies led to a partial volatility increase in global financial markets. While the US Federal Reserve (Fed) ended its quantitative easing program, uncertainties regarding the timing and size of a policy rate hike continued. In this period, the European Central Bank (ECB) cut its policy rates against the risks of economic slowdown and deflation and announced a kind of quantitative easing program of buying covered bonds and asset-backed securities. In the second and third quarters of 2014, indicators for global economic activity performed lower than expected, causing growth forecasts for this year to be revised down. Financial market volatility and falling global growth rates led to some fluctuation in capital flows to emerging economies (Chart 1). Following the weakening global growth outlook, commodity prices dropped markedly as well. BIS central bankers’ speeches  1  Regarding the developments in the Turkish economy, the recent global financial volatility appears to have affected Turkey in a way similar to other emerging economies. In the third quarter, Turkey’s risk premium indicators fluctuated on par with those of other emerging economies (Chart 2). Economic activity lost some momentum after the first quarter. The slowing EU growth and geopolitical tensions have restrained external demand.

Other priorities include the diversification of economic activity and maintenance and expansion of existing infrastructures. The government has recognized that private sector should be the engine for rapid growth. In this regard, the government has already privatized companies like the Saudi Telecommunications Company and the National Cooperative Insurance Company, and has announced schemes to privatize the Saudi Electricity Corporation, Saudi Arabian Airlines ,Ma'aden Company, etc. In the past few years, the government has also taken important initiatives including the Investment Law, the reduction of corporate taxes on foreign investments and liberalization of tourism and real estate. The government also sees significant growth opportunities for job creation in the retail trade, small enterprise, tourism and financial services. In the past year, the government has announced the creation of size economic cities in various parts of the Kingdom. These will provide significant opportunities to the private and public sector as well as to the foreign companies to invest in many industrial and infrastructure mega projects. Besides, the investment opportunities in the petrochemical sector, these economic cities would accommodate industries in steal, plastics, glass and ceramics. Another area of potential investment is the transportation sector where the government has announced several projects affecting the Railways network, air transport and land routes. There are also projects in the pipeline in electric power generation, water desalination, natural gas as well as in knowledge based industries such as health, education and tourism. The financing needs of these initiatives are immense and are becoming increasingly apparent.