TURKEY: RECENT DEVELOPMENTS January September 218
3 81 4 698 961 7 34 7 96 9 66 8 98 1 931 1 6 11 11 88 11 19 1 883 1 97 12 48 12 112 Per capita GDP tripled while nominal GDP quadrupled in last 1 years 237 311 44 49 Nominal GDP (bn USD) 872 829 762 769 67 643 9 934 88 862 849 27 2 2 17 1 Real GDP Growth (Index: 22=1) Avg. GDP Growth (23-17),8% Poland 3,9% Romania 3,9% Czechia 2,9% Hungary 1,9% 1 22 28 211 214 217 1 22 28 211 214 217 22 223 Per capita GDP (usd) Avg. Real GDP Growth (%) 6,6 4,3 3,1 22 28 211 214 217 1999-24 - 21 211-217 Source: Turkstat, CBRT, IMF 2
Favourable Demographics: Half of population under age 3 TURKEY 8-84 7-74 6-64 -4 4-44 3-34 2-24 1-14 -4 -, -,3 -,1,1,3, Females Males EUROPE 1+ 9-94 8-84 7-74 6-64 -4 4-44 3-34 2-24 1-14 -4 -, -,3 -,1,1,3, Males Females 12 11 Working Age Population (1-64) (Index: 214=1) 7 7 Total Dependency Ratio (%, Age: -14 & >64 / Age: 1-64) Europe 11 6 1 6 1 9 9 8 Europe 214 216 218 22 222 224 226 228 23 232 234 4 214 216 218 22 222 224 226 228 23 232 234 Source: Turkstat, Eurostat, UN 3
High potential with young population and improving workforce Employment (mio) 26 27 27 28 29 2 2 21 21 22 23 24 217 ~1.k 26 27 28 29 21 211 212 213 214 21 216 217 218 - Jul Unemployment rate (%) Labor Participation Rate (%) 6 4,, 1,3 2, 2,8 44, 44,3 44,9 4,7 46, 47,4 47,6 48,3 2 1 13,1 4 11,1 1,9 1,9 1, 9,9 1,3 1,8 1 9, 9,2 9,1 8,4 9, 3 26-16 avg. 688k New job creation in 217 is nearly 1,x of previous 1 year average. 26 27 28 29 21 211 212 213 214 21 216 217218 - Jul 2 Source: Turkstat 4
Strong fiscal discipline has been the main pillar of economic policy Budget Deficit (%GDP) 3, Maastricht criterion: 3% 1,3 1,9 1, 1,1 1, 1,1 1, 2, 21 211 212 213 214 21 216 217 218 * Latest figure: June 218 Peers' Budget Deficit (%GDP) General Government Debt Stock (%GDP) 9 6 83,8 86,1 89,4 91,3 91,8 89,9 88,9 86,6 84,4 Eurozone 3 7,3,3 4,8,2 4,9,2 4,2 4,7 3,7 4,1 3, 2,4 2,4 2, 2,9 9, 9, 8, 3,8 4,1 4,4 2,6 2, 1,7 21 211 212 213 214 21 216 217 Brazil S. Africa Poland Maastricht criterion 4,1 36, 32,7 31,4 28,8 27,6 28,3 28, 32,3 21 211 212 213 214 21 216 217 218 Eurozone Source: Bloomberg, IMF
Decreasing trade gap with diversified export markets 's Share in World Total Export 1,% 46 39 Exports (% of total) 42 43 44 48 47,8%,8%,8%,9%,9% 1,% 21 28 23 22 22 22 23 211 212 213 214 21 216 217 211 212 213 214 21 216 217 EU Near and Middle Eastern Trade Balance (bn USD, 12-month cumulative) Composition of Imports (%) 4 4 3 1 83 99 84 63 6 77 74 1 11,% 27 12,2% 217 3 2 1 241 237 2 242 12 12 18 13 27 199 144 143 234 239 17 16-1,9% 14,2% 1-1 73,1% 73,6% 211 212 213 214 21 216 217 218 Total Exports Total Imports Foreign Trade Gap -1 * Latest figure: September 218 Source: Bloomberg, Turkstat 6
Current account deficit is decreasing Current Account Deficit (% GDP) 9, 1,6% 1,4% 's Share in Global FDI Inflows 4,2,7,4,1,8, 6,7 4,7 3,7 3,8,6 6, 1,2% 1,%,8%,6%,8% 1,8,4%,2%,4% 26 27 28 29 21 211 212 213 214 21 216 217 218 * Latest figure: Q2, 218,% 24 26 27 28 29 21 211 212 213 214 21 216 217 3 3 2 1 1 - -1 Portfolio Inflows (12-month cumulative, bn USD) -1 26 27 28 29 21 211 212 213 214 21 216 217 218 3 3 2 1 1 Foreign Direct Investment Inflows (12-month cumulative, bn USD) 24 26 27 28 29 21 211 212 213 214 21 216 217 218 Equity Security Source: Bloomberg, CBRT, UNCTAD 7
O 16 N 16 T 16 E 16 O 17 N 17 T 17 E 17 O 18 N 18 T 18 E 18 Central bank is implementing tight monetary policy 3 27 24 21 18 CBRT Interest Rates (%) 24 18 16 14 12 1 CBRT Funding Composition (billion TRY) 18 1 12 9 8 6 4 2 6 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Interest Rate Corridor Overnight Borrowing Rate Late Liquidity Wndow Lending Rate Overnight Lending Rate 1-Week REPO Rate CBRT Average Funding Rate - day MA One-week repo Late Liquidity Window Overnight Lending TOTAL Funding 28 24 2 Annual CPI (%) 16 12 8 4 Mar-12 Mar-13 Mar-14 Mar-1 Mar-16 Mar-17 Mar-18,2 8, 7,6 7,2 6,8 6,4 6,,6,2 4,8 4,4 4, 3,6 3,2 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 USD/TRY Basket (. EUR &.USD) EUR/TRY Source: Bloomberg, CBRT 8
Argentina Indonesia Mexico Hungary Brazil Canada Czech Rep. China Russia Poland Netherlands Portugal Spain Belgium Italy Ireland UK USA Austria Germany France Japan Greece India Argentina Canada Mexico Hungary Czech Rep. Indonesia Brazil China Netherlands Spain Belgium Poland Portugal UK Italy Russia Germany France Japan Austria Ireland USA Greece India Ireland Netherlands UK Indonesia China Germany France Belgium Austria Poland Czech Rep. Hungary Brazil Japan Italy Greece Mexico Spain Canada Portugal Argentina USA India Russia Canada China UK USA Japan Germany Czech Rep. Netherlands Mexico Austria Argentina Belgium Indonesia Hungary France Brazil Poland Spain Ireland India Russia Portugal Italy Greece Well capitalized, strong banking sector attracts foreign interest 3 Capital Adequacy Ratio (CAR) (%) 4 4 Non-performing Loans to Total Gross Loans (NPL) (%) 46 2 22 2 2 19 19 19 18 18 18 18 18 17 17 17 17 16 16 1 1 1 1 1 1 3 3 1 1 12 2 1 1 1 1 1 1 2 2 2 2 2 2 2 3 3 3 3 3 4 4 9 11 11 12 14 4 4,7 Return on Assets (ROA) (%) 4 4 3 39 Return on Equity (ROE) (%) 3 2 1-1 2,4 2,2 2,2 2, 1,6 1,2 1,1 1,1,8,8,8,7,7,6,6,6,,4,4,4,4,2,1 -,1 3 2 1 1-22 21 2 2 18 16 1 14 13 9 8 8 8 8 8 6 6 6 4 4-1 Source: IMF FSI Latest Available Data for Each Country by September 218. data acquired from BRSA. 9
The banking sector grew as a result of its strong asset quality and was able to maintain high profits 6,4, 3,9 3,6 3,8,6 3,8 2,8 2,9 2,8 2,9 3,2 3,4 3,1 3,3 Non-Performing Loan Ratio (%) Banking Sector Total Asset (billion TL) 4. 4.21 4. 3. 3.8 3. 2. 2. 1. 1. * Latest figure: Sep 218 2.731 2.37 1.994 1.732 1.371 1.218 1.7 21 211 212 213 214 21 216 217 218-Q3 Capital Adequacy Ratio (%) 2 Profitability Ratio (%) 19, 16,6 17,9 1,3 16,3 1,6 1,6 16,9 18,1 16 12 11,28 14,28 16,4 Target Rate of %12 Legal limit of %8 21 211 212 213 214 21 216 217 218 * Latest figure: Sep 218 8 4 1,16 1, 1,63 Dec-21 Dec-216 Dec-217 Net Income / Average Total Assets (%) Net Income / Average Shareholder's Equity (%) Source: BRSA 1
Tourism revenues and number of visitors doubled between 24-214. Strong recovery has been continuing in 218! # of Foreign Visitors vs. Revenues Foreign Arriving Visitors Change (YoY,%) 17 17 21 2 19 19 23 21 26 27 29 31 31 28 29 34 32 36 36 34 31 22 32 26 38 29 6 4 2-2 -4 24 26 28 21 212 214 216 218 L12M Revenue (bn. USD) # of tourists (mio) * Latest figure: Q3-218 -6 27 28 29 21 211 212 213 214 21 216 217 218, Direct Contribution to GDP* (%) 1 Tourism Revenue* 4, 4, 3, 24 27 21 213 216 219 222 2 * Based on WTTC data 24 27 21 213 216 219 222 2 Source: Turkstat, WTTC 11
Air traffic more than tripled in last 1 years 1, billion people and $24T GDP at 4 hour flight-distance mio Passengers Carried () 2 1 1 4 6 Domestic International Total 7 62 79 86 13 118 13 149 166 181 174 193 24 26 27 28 29 21 211 212 213 214 21 216 217 Turkish Airlines connects you to 34 destinations in 122 countries * As of 3.6.218 Source: Turkstat, Turkish Airlines Investor Presentation 12
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