turalay kenc : the turkish economic outlook and monetary policy – challenges and policy response remarks by mr turalay kenc, deputy governor of the central bank of the republic of turkey, at the eu ambassadors meeting, ankara, 28 january 2016. * * * i would like to start by thanking his excellency ambassador cornelis van rij for the opportunity to share with such distinguished audience some views about the turkish economy, the challenges stemming from a very volatile external environment, and the policy approach that has been implemented to cope with these challenges. the turkish economy has shown a relatively robust performance in the face of major external and internal shocks. gdp growth is estimated at around 4 percent in 2015 with an expected gradual strengthening of economic activity in 2016 and in 2017. the rise in gdp growth rate observed in 2015 is mostly attributed to strong private consumption. private investment recorded a moderate recovery. the challenging external conditions especially geopolitical events in the region have adversely affected exports. however, the economic recovery in most eu member states enabled turkey to largely compensate its loss in other exports markets as turkey increased exports to the eu countries by more than 10 percent in euro terms in 2015. this outcome also highlights turkish exporters ’ resiliency in adopting to adverse economic conditions. of course, probably the most significant development of the last year or so has been the sharp decline in oil prices. turkey, being an energy importing country benefited from lower oil prices in many dimensions. the current account deficit fell from $ 52 billion in june 2014 to below $ 35 billion in november 2015 in 12 month rolling terms. this sharp improvement in the current account balances is also greatly helped by prudent macro - economic polices including monetary, macro - prudential and fiscal policies. tight monetary policy, well - targeted macroprudential measures and strong fiscal balances have all contributed to lower levels of domestic demand by stabilizing loan growth and reducing risk taking behavior. going forward, the current levels in oil prices and depressed producer prices in most part of the world due to weak economic activity are expected to lead to further improvements in external balances. therefore, it is highly likely that turkey will record a current account deficit of below 4 percent of its gross domestic product in 2016, representing a major achievement in satisfying the norm of the european union ’ s macroeconomic imbalances procedure. unlike these positive developments in the economy, inflation increased and its outlook worsened in 2015 reflecting the pass - through from the tl

durmus yılmaz : evaluation of global financial developments and structrual reforms speech by mr durmus yılmaz, governor of the central bank of the republic of turkey, at the 19th annual world business congress, konya, central anatolia, 21 july 2010. * * * honorable rector, esteemed academicians, distinguished guests, we are gathered here today for the 19th annual world business congress of the international management development association ( imda ), where the lessons learned from past experiences in the global business world, current issues and future tendencies will be discussed. i would like to congratulate everyone, notably prof. dr. mehmet babaoglu, rector of karatay university, and distinguished members of the university for their contributions to organizing this esteemed congress, which is held in a different country each year. i would like to start my speech with a brief evaluation of global financial developments. then i will address structural reforms, which we deem essential for raising turkey ’ s potential growth rate, when considering the turkish economy on a macro scale and from in a longterm perspective. 1. global developments : as is known, problems, which emerged in the global financial markets about two years ago and spread across the corporate sector over time, affected the turkish economy as well as other economies. we see that the impact of global turmoil on economies mainly emerged through three channels : ( 1 ) foreign trade, ( 2 ) capital flows and ( 3 ) expectations. the turkish economy has been affected by global turmoil through all these three channels due to its structural features. low level of domestic savings in the turkish economy, significant share of advanced economies in our exports, sensitivity of our exports to global economic cycles and deterioration in expectations of the private sector have caused a sharp slowdown in economic activity. however this contraction did not last long and turkey has become one of the countries that have rapidly recovered from global turmoil. in other words, unlike previous crises, the turkish economy has resisted global turbulence well owing to its structural transformation and policy implementations that have been underway since 2001. the main reasons for this resistance are the resilience gained from the implementation of a floating exchange rate regime, the robust structure of our banking system, counter - cyclical monetary policy implemented before and during the crisis and the room for maneuver provided to public finance by the fiscal discipline observed in the pre - crisis period. these factors, coupled with the subduing effects of the crisis, have promoted