MINISTRY of ECONOMY ECONOMIC OUTLOOK MAY 2012 Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update:05/07/2012 May 2012

MINISTRY of ECONOMYMINISTRY of ECONOMY

ECONOMIC OUTLOOK

MAY 2012MAY 2012

Economic Outlook is revized in the 1st and the 3rd weeks of the month.Recent Update:05/07/2012

May 2012 May 2012 Ministry of Economy Ministry of Economy 11

A- MACROECONOMIC OUTLOOKA- MACROECONOMIC OUTLOOK

B- FOREIGN TRADE OUTLOOKB- FOREIGN TRADE OUTLOOK

1) MERCHANDISE1) MERCHANDISE

2) SERVICES2) SERVICES

C- INVESTMENTS , FOREIGN CAPITAL and INCENTIVESC- INVESTMENTS , FOREIGN CAPITAL and INCENTIVES

D- FREE ZONES in TURKEYD- FREE ZONES in TURKEY

E- BILATERAL, REGIONAL, PLURILATERAL and MULTILATERAL TRADEE- BILATERAL, REGIONAL, PLURILATERAL and MULTILATERAL TRADE

OUTLINEOUTLINE

May 2012 Ministry of EconomyMay 2012 Ministry of Economy 22

A- MACROECONOMIC OUTLOOKA- MACROECONOMIC OUTLOOK


Growth Forecasts for Selected Countries/Country Groups (%)Growth Forecasts for Selected Countries/Country Groups (%)

Turkish Economy expanded by 8,5% in 2011. According to the IMF, Turkish Economy is expected to grow by 2,3% in

2012.

Source: IMF, OECD, UN, WB


Turkey Euro Area US Brazil Russia India China2012 2.3 -0.2 2.0 4.7 3.9 6.9 8.42013 3.2 1.4 2.6 3.4 4.1 7.2 8.42016 4.3 1.7 3.4 4.2 3.8 8.1 9.5

OECD 2012 3.0 0.2 2.0 3.2 4.1 7.9 8.52012 2.9 -0.3 2.2 3.4 3.5 6.5 8.42013 4.2 1.1 2.4 4.4 3.9 7.7 8.32012 3.2 0.4 0.7 2.7 3.9 7.7 8.72013 5.4 1.3 1.7 3.8 4.0 7.9 8.5

Growth Forecasts for Selected Countries/Country Groups (%)

IMF

WB

UN

According to the IMF estimates, global trade volume of merchandise and services is expected to increase by 3.8% in 2012 and 5.4% in 2013.

According to the WTO estimates, global trade volume of merchandise and services is expected to increase by 3.7% in 2012 and 5.6% in 2013.

Forecasts for Merchandise and Services Trade Growth (%)Forecasts for Merchandise and Services Trade Growth (%)

Source: IMF and WTO


YearsAdvanced Economies

Emerging Markets

Advanced Economies

Emerging Markets

2012 2.4 6.1 2 7.1 3.82013 4.7 7 3.9 7.7 5.42012 2 5.6 1.9 6.2 3.72013 4.1 7.2 3.9 7.8 5.6

Exports Imports World Trade

Volume

IMF

WTO

Economic Targets of 2012-2014 Medium Term ProgrammeEconomic Targets of 2012-2014 Medium Term Programme

*Forecast (Medium Term Programme, Ministry of Development – October 13, 2011)

Medium Term Programme aims to sustain economic growth, to decrease the current account deficit, and to preserve macroeconomic and financial stability.


2012* 2013* 2014*GDP (Billion $, Current Prices) 822 888 952GDP Per Capita ($) 10,973 11,716 12,412Real GDP Growth 4.0 5.0 5.0Unemployment Rate (%) 10.4 10.2 9.9Tourism Income (Billion $) 26 29 31Current Account Balance (Billion $) -65.4 -67 -67.1Current Account Balance / GDP (%) -8.0 -7.5 -7.0

Real GDP Growth of Selected Countries/Country Groups (2011)Real GDP Growth of Selected Countries/Country Groups (2011)

Turkish Economy expanded by 8,5% in 2011, which was well beyond the expectations of the IMF (7.5%).

Source: TURKSTAT, IMF


Annual Economic Growth Rates (2002-2011)Annual Economic Growth Rates (2002-2011)

* Forecast, Medium Term Programme Source:TURKSTAT Turkey has recovered fast from the global financial crisis and amongst

those countries affected less from current global economic uncertainties.

Turkey has the fastest economic growth rates in Europe. Mean annual growth rate between 2002 and 2011 was 6%. Real GDP growth for 2011 realized as 8,5%.


GDP Per CapitaGDP Per Capita

Source: Dollar value is from TURKSTAT

GDP per capita has tripled in the last ten years from 3,492 USD to 10,444 USD. According to Purchasing Power Parity (PPP),GDP per capita came close to 16 thousand USD.


Capacity Utilization Ratio (%)Capacity Utilization Ratio (%)

Source: TURKSTAT

Capacity utilization ratio realized as 74.7% in April 2012.


Industrial Production IndexIndustrial Production Index

Source: TURKSTAT

Industrial production index increased by 4.4% year-over-year in February 2012 up to 118.45


Inflation (Annual Percent Change)Inflation (Annual Percent Change)

Annual inflation in 2011 realized as 10.4%.

Source: TURKSTAT


Real Effective Foreign Exchange Rate (2003=100)Real Effective Foreign Exchange Rate (2003=100)

As of April 2011, Turkish Lira has depreciated by 2.2% annually in terms of the CPI-based real effective exchange rate.

The level of depreciation is 4.9% in terms of the PPI-based real effective exchange rate.

Source: CBRT


Total Credits and Consumer Credits (Billion TL)Total Credits and Consumer Credits (Billion TL)

Credits and specifically consumer credits increased in parallel to the growing domestic demand.

Total credits increased slightly on a monthly basis in March 2012.


CDS Premiums (May 5th, 2012)CDS Premiums (May 5th, 2012)

* Higher CDS premiums indicate higher risk levels.

CDS premium of Turkey is significantly low compared to most of the European countries.


Financial MarketsFinancial Markets

Total assets of the banking sector increased by 20.6% and reached 1.22 trillion TL in February 2012.

Capital Adequacy Ratio of Turkish Banking Sector is 16,76% in January 2012.


Data on Banking Sector 2011 Feb. 2012 Feb.Number of Banks 48 48Number of Domestic Branches 10.116 10.483Number of Foreign Branches 69 77Number of Total Personnel Employed 192.562 195.132Total Assets (Million TL) 1.049.680 1.221.097Total Equities (Million TL) 134.748 151.629Net Profit or Loss (Million TL) 3.095 3.445Nonperforming Loans (Gross) / Cash and Cash Equivalents (%) 3,39 2,78Net Profit or Loss / Average Equities (%) 2,36 2,34Liquid Assets with 12 Months of Maturity / Total Assets (%) 70,39 72,68Capital Adequacy Ratio (%) 18,14 16,76

EU Defined Budget Deficit/ GDP (%)EU Defined Budget Deficit/ GDP (%)

EU defined general government budget deficit/GDP ratio was 2.6% in Turkey in 2011 and Turkey satisfied the Maastricht criteria of 3%. Turkey also outperformed 18 EU Countries.

Central government budget deficit/GDP ratio was 1.3% in Turkey in 2011 and Turkey outperformed 23 EU Countries.

In January-March 2012, central government budget deficit has increased by %55.9 to 6.4 billion dollars.

2011


Government Debt / GDP (%)Government Debt / GDP (%)

Debt/GDP ratio of Turkey was 39.4% in 2011, which was below the level in 21 EU Countries and the Maastricht Criteria (60%).


Unemployment Rates (%)Unemployment Rates (%)

Unemployment rates have returned to the pre-crisis level. In January 2012, the unemployment rate was 10.2%. Seasonally adjusted

unemployment rate was 8.9%. Seasonally adjusted unemployment rate in Euro Area was 10.9% and 10.2% in

(EU27) in March. Turkey has the 5th largest labor force among the European countries. (2009, World

Bank)

Source: TURKSTAT


Potential of Population (2010)Potential of Population (2010)

Source: World Bank

Turkey has a population of 74.7 million in which half of the population is under the age of 29.7.

Growth rate of population is 1.36% in Turkey, 0.28% in EU Countries and -0.24% in Germany.

2020May 2012 Ministry of EconomyMay 2012 Ministry of Economy

Cell phone penetration rate in households: 91.9% Internet access rate in households: 42.9% Internet access rate in enterprises: 90.9% PC penetration rate in households: 34.3% Laptop penetration rate in households: 22.6% Digital camera penetration rate in households: 27.8% Printer penetration rate in households: 14.0% 1 of each 5 people owns a vehicle. (2010)

Growing Dynamism in Turkey's Domestic MarketGrowing Dynamism in Turkey's Domestic Market


B- FOREIGN TRADE OUTLOOKB- FOREIGN TRADE OUTLOOK


I) MERCHANDISEI) MERCHANDISE


Targets in Merchandise TradeTargets in Merchandise Trade

* Actual (Source: TURKSTAT)**Forecast: Medium Term Programme, Ministry of Development- 13/10/2011)


(Billion $) 2010* 2011* 2012** 2013** 2014**Exports 114 135 148.5 165.7 185.1Imports 185.5 240.8 248.7 272.5 295.9Volume of trade 299.5 375.8 397.2 438.2 481Balance of trade -71.6 -105.8 -100.2 -106.8 -110.8Exports/Imports (%) 61.4 56.1 59.7 60.8 62.6

Turkey's Share in Global Merchandise Exports (%)Turkey's Share in Global Merchandise Exports (%)

Turkey’s share in global merchandise exports was %0.74 in 2011.


2626

Foreign Trade Volume/GDP (%)Foreign Trade Volume/GDP (%)

The ratio of foreign trade volume/GDP was 48,7% in 2011. Turkey’s integration to the international trade system is eminent.

May 2012 Ministry of EconomyMay 2012 Ministry of Economy

Foreign Trade Developments Foreign Trade Developments

In January- March 2012 compared to the same period of the previous year, exports increased by 12,6 % and imports decreased by 0,7% respectively.

Source:Ministry of Economy


2009 - 2011 / 2011-2012 January-March 2009 - 2011 / 2011-2012 January-March

* Energy corresponds to Chapter 27.

2010 20112011 (Jan.-

Mar.)2012 (Jan.-Mar.)

Change (%) 2011/2012

Export 113,9 135,0 31,4 35,4 12,6Energy Export 4,5 6,5 1,4 2,0 42,9Gold Export 2,1 1,5 0,3 1,3 333,3

Import 185,5 240,8 56,1 55,7 -0,7Energy Import 38,5 54,1 11,7 14,6 24,8Gold Import 2,5 6,2 1,1 0,7 -36,4

Foreign Trade Volume 299,4 375,8 87,5 91,1 4,1Foreign Trade Balance -71,7 -105,9 -24,6 -20,3 -17,5Balance excl.Energy -37,6 -58,3 -14,4 -7,7 -46,5Export/Import (%) 61,38 56,04 56 64 *

Periodic (Billion $)Annual (Billion $)

Monthly Exports Monthly Exports


In March 2012 compared to March 2011 exports have increased by 12,2% and imports have decreased by 4,8% and reached to the level of 13,3 and 20,6 billion dollar respectively.

Distribution of Foreign Trade in Broad Economic Categories Distribution of Foreign Trade in Broad Economic Categories

EXPORT

2929

IMPORT


2010/2011 2011/20122010 2011 Change % 2011 2012 Change %

Investment Goods 11.771 14.167 20,4 3.227 3.506 8,6Intermediate Goods 56.381 67.981 20,6 15.739 18.285 16,2Consumption Goods 45.321 52.252 15,3 12.372 13.467 8,9Others 411 555 35,0 83.170 108.990 31,0TOTAL 113.883 134.954 18,5 31.421 35.367 12,6

(Million $) Annual Periodic (Jan.-Mar.)

2010/2011 2011/20122010 2011 Change % 2011 2012 Change %

Investment Goods 28.818 37.268 29,3 8.207 8.263 0,7Intermediate Goods 131.445 173.135 31,7 40.263 41.126 2,1Consumption Goods 24.735 29.692 20,0 7.258 6.128 -15,6Others 546 739 35,3 341.132 174.174 -48,9TOTAL 185.544 240.833 29,8 56.068 55.691 -0,7

(Million $) Annual Periodic (Jan.-Mar.)

Main Export Items Main Export Items

Source: TURKSTAT

3030

* Percent change is related to the annual change in exports in 2012.


Million Dollar CHANGE %Periodic (Jan.-Mar.) 2011 2012 2011 2012 2011 2012 2011/2012

1 Vehicle other than railway or tramway 3.892 4.023 3.955 2.945 -63 1.078 3,42 Boilers, machinery and mechanical appliances 2.590 2.862 5.899 6.062 -3.309 -3.200 10,53 Iron and Steel 2.621 2.898 4.806 4.838 -2.185 -1.940 10,64 Electrical machinery and equipment, parts thereof 1.970 2.360 3.940 3.988 -1.970 -1.628 19,85 Pearls, precious stones, precious metals and articles thereof 815 1.952 1.253 930 -438 1.022 139,56 Knitted and crocheted goods and articles thereof 2.090 2.061 275 200 1.815 1.861 -1,47 Mineral fuels, mineral oils and product of their distillation 1.448 2.017 11.725 14.635 -10.277 -12.618 39,38 Articles of iron and steel 1.343 1.465 592 526 751 939 9,19 Non-knitted and crocheted goods and articles thereof 1.291 1.404 461 382 830 1.022 8,8

10 Plastic and articles thereof 1.013 1.128 3.158 3.124 -2.145 -1.996 11,419.073 22.170 36.064 37.630 -16.991 -15.460 16,231.421 35.367 56.068 55.691 -24.647 -20.324 12,6

EXPORT IMPORT BALANCE

LIST TOTALTOTAL

Main Import Items Main Import Items

Source: TURKSTAT

3131

* Percent change is related to the annual chamge in imports in 2012.


Million Dollar CHANGE %Periodic (Jan.-Mar.) 2011 2012 2011 2012 2011 2012 2011/2012

1 Mineral fuels, mineral oils and product of their distillation 11.725 14.635 1.448 2.017 -10.277 -12.618 24,82 Boilers, machinery and mechanical appliances 5.899 6.062 2.590 2.862 -3.309 -3.200 2,83 Iron and steel 4.806 4.838 2.621 2.898 -2.185 -1.940 0,74 Electrical machinery and equipment, parts thereof 3.940 3.988 1.970 2.360 -1.970 -1.628 1,25 Vehicle other than railway or tramway 3.955 2.945 3.892 4.023 -63 1.078 -25,56 Plastic and articles thereof 3.158 3.124 1.013 1.128 -2.145 -1.996 -1,17 Aircraft and parts thereof 1.125 1.041 78 94 -1.047 -947 -7,58 Organic chemicals 1.370 1.215 148 151 -1.222 -1.064 -11,39 Pearls, precious stones, precious metals and articles thereof 1.253 930 815 1.952 -438 1.022 -25,8

10 Pharmaceutical products 1.128 962 138 140 -990 -822 -14,738.359 39.740 14.713 17.625 -23.646 -22.115 3,656.068 55.691 31.421 35.367 -24.647 -20.324 -0,7

IMPORT EXPORT BALANCE

LIST TOTAL TOTAL

Main Export Partners (Share,%)

Main Trade Partners (JanuaryMain Trade Partners (January-March -March 20120122))

Main Import Partners (Share,%)

Source: TURKSTAT


Exports by RegionsExports by Regions

Source: TURKSTAT


2011 2012 Change(%) 2011 2012 Change(%) A- EU (27) 5.704 5.513 -3,3 15.173 14.945 -1,5 B- FREE ZONES IN TURKEY 223 208 -7,0 586 612 4,4 C- OTHER COUNTRIES 5.884 7.529 28,0 15.661 19.810 26,5 1- OTHER EUROPE 1.096 1.203 9,7 2.908 3.403 17,0 2- AFRICA 811 1.334 64,6 2.192 3.468 58,2 North Africa 492 859 74,9 1.449 2.374 63,8 Other Africa 319 475 48,9 743 1.094 47,2 3- AMERICA 766 883 15,2 1.805 2.458 36,2 North America 540 593 9,7 1.281 1.735 35,4 Central America And Caraips 59 92 57,4 151 236 56,4 South America 168 198 18,0 374 487 30,4 4- ASIA 3.130 4.064 29,9 8.581 10.300 20,0 Near And Middle Eastern 2.231 3.144 40,9 6.387 7.842 22,8 Other Asia 899 920 2,4 2.195 2.458 12,0 5- AUSTRALIA AND NEW ZEALAND 40 40 1,1 109 116 6,8 6- OTHER COUNTRIES AND REGIONS 41 5 -88,8 66 65 -1,6

TOTAL 11.811 13.251 12,2 31.420 35.367 12,6

(Million $)March January-March

ImportImports by Regionss by Regions

Source: TURKSTAT


2011 2012 Change(%) 2011 2012 Change(%) A- EU (27) 8.545 7.784 -8,9 21.086 20.541 -2,6 B- FREE ZONES IN TURKEY 107 88 -17,3 260 248 -4,6 C- OTHER COUNTRIES 12.991 12.724 -2,1 34.722 34.902 0,5 1- OTHER EUROPE 2.757 2.838 3,0 8.747 8.331 -4,8 2- AFRICA 467 501 7,1 1.408 1.263 -10,3 North Africa 275 294 7,1 742 716 -3,5 Other Africa 193 206 7,1 666 548 -17,8 3- AMERICA 2.254 1.937 -14,0 5.629 5.074 -9,8 North America 1.711 1.430 -16,4 4.377 3.804 -13,1 Central America And Caraips 76 74 -2,3 225 236 4,8 South America 466 432 -7,3 1.026 1.034 0,8 4- ASIA 6.498 6.509 0,2 16.447 17.349 5,5 Near And Middle Eastern 1.631 2.326 42,6 4.160 5.488 31,9 Other Asia 4.867 4.182 -14,1 12.287 11.861 -3,5 5- AUSTRALIA AND NEW ZEALAND 73 39 -46,2 197 162 -17,7 6- OTHER COUNTRIES AND REGIONS 941 900 -4,4 2.296 2.723 18,6

TOTAL 21.643 20.597 -4,8 56.068 55.691 -0,7

(Million $)March January-March

Tariff RatesTariff Rates

Source: WTO Tariff Profiles, 2011


2) SERVICES TRADE2) SERVICES TRADE


Tourism: Besides increasing the number of tourist arrivals, creating a structure that improves service quality, targets high-income groups by diversifying marketing channels, preserves natural capital and sustainability, and stimulates those types of tourism where Turkey has comparative advantages

Construction, Engineering-Architecture, Technical Consultancy and Contracting Services: Establishing a structure that fits Turkey’s economic and social needs, that is compatible with high technology and international rules, that is sensitive to environment, that creates high value added, high foreign exchange inflow and high employment, that grants high service quality, and that relies on qualified human and physical capital.

Commercial Services: Increasing productivity and commercial trade volume in a competitive way, and to encourage technology and innovation.

Targets in ServicesTargets in Services


Turkey's Share in Global Services Exports (%)Turkey's Share in Global Services Exports (%)

Source: WTO, CBRT

Turkey’s share in global exports of services was 0.92% in 2011.


Balance of Payments - ServicesBalance of Payments - Services

*January-FebruarySource: CBRT


Tourism Statistics (Quarterly)Tourism Statistics (Quarterly)


Tourists visited, Source: TURKSTAT Turkey ranks as the 7th in the world and the 5th in Europe among the

most favourite tourism destinations. Turkey’s income per tourist increased by 18% in 2010 and 1% in 2011.

Constructing Services AbroadConstructing Services Abroad

4141

31 out of the world’s top 225 constructing companies are Turkish.

Turkey ranks as the 2nd country (following China) in terms of the number of top constructing companies.

Contributions to the overall economic performance: Creating foreign exchange inflow, exports, employment, technology transfer; adding to the machinery stock, facilitating internationalization


Years Projects CountriesCum.

Project Volume ($)

Avr. Project

Volume ($)

2002 128 32 2.438 192003 276 37 4.205 152004 418 39 11.286 272005 403 34 11.164 282006 518 36 20.578 402007 575 44 24.962 432008 613 40 24.267 402009 477 45 22.593 472010 573 50 22.635 402011 455 45 19.363 43

2012* 50 14 3.482 62* January-April

LogisticsLogistics

4242

Europe’s biggest truck fleet (45 thousands trucks and 1,420 companies) Almost 1 million flights in 2011 (2.3 million tonnes freight and 117 million passengers) 25. biggest fleet in the world 45 airports and 51 ports Total length of divided highways will reach 15 thousand

kilometers. High-speed railway projects are carried out rapidly.


EnergyEnergy

4343

Turkey is an energy hub between energy producer and consumer regions


C- INVESTMENTS, FOREIGN CAPITAL and C- INVESTMENTS, FOREIGN CAPITAL and INCENTIVESINCENTIVES


Investment Climate in TurkeyInvestment Climate in Turkey

4545

1- SOUND ECONOMIC PERFORMANCE 6- CENTRAL LOCATION2- YOUNG and DYNAMIC POPULATION

7- ENERGY CORRIDOR and TERMINAL of EUROPE

3- QUALIFIED and COMPETITIVE LABOR FORCE

8- LOW TAX RATES and INCENTIVE FACILITIES

4- LIBERAL and INNOVATIVE INVESTMENT CLIMATE

9- CUSTOMS UNION with EU and OPEN ECONOMY

5- INFRASTRUCTURE 10- DOMESTIC MARKET

10 REASONS TO INVEST IN TURKEY


Time Time RRequired to equired to SStart a tart a BBusinessusiness

The required time to start a business is 6 days in Turkey.

Source: Invest In Turkey


Skilled Labour AvailabilitySkilled Labour Availability

Scoring is between 0 and 10.



Transparency in Finance SectorTransparency in Finance Sector


4848

Scoring is between 0 and 10.


The Sectoral Breakdown of Foreign InvestmentsThe Sectoral Breakdown of Foreign Investments

Source: CBRT

(Million $) 2010 2011 2011* 2012*AGRICULTURE 82 31 2 9INDUSTRIAL SECTORS 2,861 7,770 450 446 Mining and Quarrying 139 148 5 22 Manifacturing 905 3,363 178 352 Production and Distribution of Electricity, Gas, 1,817 4,259 267 72SERVICES SECTOR 3,295 8,085 664 825

TOTAL 6,238 15,886 1,116 1,280

* January - February


Breakdown of Foreign Investments by CountryBreakdown of Foreign Investments by Country

Source: CBRT


* January – February

2010 2011 2011* 2012*1 Netherlands 486 1,623 392 3852 Malaysia 6 15 0 2303 Azerbaijan 12 1,265 0 1514 Luxemburg 292 481 70 1445 Germany 597 605 120 726 USA 323 1,403 48 677 UK 245 917 14 378 Norway 19 76 0 279 Italy 25 98 10 24

10 Austria 1,584 2,235 50 2211 Switzerland 122 233 51 1812 Hong Kong 21 163 0 1713 Greece 436 123 10 1014 China 0 0 0 915 France 623 985 193 816 Bahrain 0 5 0 717 Kuwait 193 38 6 618 Spain 205 2,230 17 519 Albania 0 0 0 520 Cayman Islands 0 54 54 5

5,189 12,549 1,035 1,2496,238 15,886 1,116 1,280

LIST TOTALTOTAL

Million $

Investment Incentive SystemInvestment Incentive System

The current investment incentive system of Turkey is structured in four sub systems:

General Investment Incentive System Regional Investment Incentive System Investment Incentive System for Big Scale

Projects Incentives for Strategic Investments


Investment Incentives (January-February)Investment Incentives (January-February)

Source: General Directorate of Incentive Implementation and Foreign Investment


2010 937 8.350 33.1012011 1.229 17.008 34.4892012 938 11.760 26.906

Certificates Issued

Amount of Fixed Investments (Million TL)

Potential Employment

(People)

Region I Region II Region III Region IV TOTAL2010 276 130 298 233 9372011 403 198 354 274 1.2292012 346 111 303 178 938

CERTIFICATES ISSUED

D - FREE ZONES IN TURKEYD - FREE ZONES IN TURKEY


Tax advantages for manufacturers Medium-and long-term investment view Availability to transfer profits Commercial facilities Exemptiın from customs duties Acquisition of the documents relating to the free movement of goods under the

scope of Customs Union with the EU Principle of equality No time restrictions Flexibility to adjust to the market needs and conditions Reliable inflation accounting Market access to domestic and foreign markets Reduced bureaucratic procedures and dynamic business management Strategic advantages. Affordable and compatible infrastructure Supply chain opportunities

The Advantages of Free Zones for UsersThe Advantages of Free Zones for Users


Free Zones in TurkeyFree Zones in Turkey

54,022 people have been employed in Free Zones of Turkey in 2011.


Trade Flows of Free ZonesTrade Flows of Free Zones

In January-February 2012 total trade volume of the Free Zones reached to 3.7 billion dollars, increasing 17 % annually.

Source: General Directorate of Free Zones, Foreign Investments and Services

*January-February


Million $ 2008 2009 2010 2011 2011* 2012*From Domestic Market to Free Zones 3,195 2,177 2,295 2,668 392 480From Free Zones to Abroad 5,874 4,914 4,361 6,924 785 1,116From Abroad to Free Zones 8,248 5,493 6,626 7,253 1,127 1,096From Free Zones to Domestic Market 7,262 5,174 5,291 5,801 855 1,000

TOTAL TRADE VOLUME 24,578 17,757 18,572 22,646 3,159 3,692

Concentration in Free Zones by IndustriesConcentration in Free Zones by Industries

Source: General Directorate of Free Zones, Foreign Investments and Services

Istanbul Ataturk Airport FZ Services and SoftwareAntalya FZ Yacht-building, Medical EquipmentKocaeli FZ Ship-buildingAvrupa FZ Ready-WearMersin FZ Ready-WearBursa FZ Automotive sub-industriesIzmir FZ LeatherTUBITAK-MAM FZ R&D ActivitiesAdana-Yumurtalik FZ Ship Repair and Maintenance


E - E - BBIILATERAL, REGLATERAL, REGIIONAL, ONAL, PLURILATERAL and PLURILATERAL and MULTMULTIILATERAL LATERAL

TRADETRADE


Trade Relationships of Turkey with OthersTrade Relationships of Turkey with Others

Bilateral Trade Relationships of Turkey

Europe, Asia-Pacific, Eurasia, Middle East and North Africa, Sub-Saharan Africa, Americas

Regional and Multiple Trade Relationships of Turkey

EU, ECO, D8, BSEC, OIC, COMCEC

Multilateral Trade Relationships of Turkey

WTO, OECD, ACTA


Regional Breakdown of ExportsRegional Breakdown of Exports

Source: TURKSTAT * January-March ** Except Lebanon and Mauritius

In January-March period of 2012, our exports to OECD countries increased 7.2 % and our exports to FTA countries increased 25.8 % annually. The annual increase of our exports to EFTA countries in the same period was 72.7 % and EFTA countries became the fastest growing export destination of the regions above.


(Million $) 2010 2011 Change %Share % (2011)

2011* 2012* Change %Share % (2012*)

CIS 10,288 13,383 30.1 9.9 2,889 3,321 14.9 9.4EFTA 2,416 1,892 -21.7 1.4 442 763 72.7 2.2Economic Cooperation Organisation 7,617 9,295 22.0 6.9 2,039 2,606 27.8 7.4Organization of Islamic Conference 32,470 37,338 15.0 27.7 8,373 11,068 32.2 31.3Black Sea Economic Cooperation 14,456 17,774 23.0 13.2 3,951 4,236 7.2 12.0OECD 61,491 71,655 16.5 53.1 16,315 16,988 4.1 48.0FTA Countries** 12,702 13,619 7.2 10.1 2,957 3,719 25.8 10.5Turkic Republics 3,921 5,043 28.6 3.7 1,001 1,251 25.0 3.5

LIST TOTAL 113,883 134,915 18.5 100.0 31,420 35,367 12.6 100.0

Chronological Evolution of the Relationship between Turkey and the EUChronological Evolution of the Relationship between Turkey and the EU

12 September 1963: Ankara Agreement 13 November 1970: The signing of the Additional Protocol 1 January 1973: Additional Protocol to come into force 14 April 1987: Turkey’s Application for Membership 5 March 1995: The Association Council Decision Establishing the

Customs Union 10-11 December 1999: Recognition of the Candidate Status of

Turkey at the Helsinki Summit 8 March 2001: The first Accession Partnership Document issued 17 December 2004: European Council decision to start

Negotiations with Turkey in Brussels Summit 3 October 2005: Start of the Negotiations between Turkey and the

EU 20 October 2005: Start of the Screening Process 13 October 2006: End of the Screening Process


The process of Accession Negotiations between Turkey and the EUThe process of Accession Negotiations between Turkey and the EU

Negotiations for 1 chapter were temporarily opened and closed afterwards.– Science and Research

Negotiations for 12 chapter were opened but closure criteria to all those negotiations were imposed bt the EU.

– Business and Industry Policy, – Statistics, – Financial Control, – Consumer and Health Protection, – Trans-European Networks, – Intellectual Property Law, – Company Law, – Free Movement of Capital, – Information Society and Media, – Taxation, – Environment, – Food Safety, Veterinary and Plant Health

Position papers of Turkey for 2 negotiations were forwarded to the EU. EU Common Position Paper is expected to be announced.

– Education and Culture,– Economic and Monetary Policy

For the opening of 8 chapters opening criterias of the EU have to be met by Turkey.In all other chapters, Screening Reports are expected to be announced by the EU.


Trade between Turkey and the EUTrade between Turkey and the EU

Source: Data Source of the Ministry of Economy


1. EFTA (Norway, Switzerland, Iceland, Liechtenstein)

2. Israel3. Macedonia4. Croatia5. Bosnia and Herzegovina6. Palestine7. Tunisia8. Morocco9. Syria

FTA CountriesFTA Countries

10. Egypt11. Albania12. Georgia13. Montenegro14. Serbia15. Chile16. Jordan17. Lebanon*18. Mauritius*

(*) Agreements that are in the approval process


Our exports to FTA Countries increased %7,2 in 2011. The share of FTA Countries in total exports reached

10%. Turkey recorded a trade surplus of 1,4 billion USD in

2011 with FTA Countries, while there was a trade deficit of 1.5 billion USD in 2002.

Trade with FTA CountriesTrade with FTA Countries


Trade Representatives AbroadTrade Representatives Abroad

195 trade representatives from the Ministry are serving in 130 locations and 6 offices abroad.


Daimi Temsilci Yardımcılığı

Ticaret Müşavirliği

Ticaret Ataşeliği

İrtibat Büroları

AFRİKA

KahireNairobi PretoriaRabatTrablusTunusKazablanka

ASYA

Astana Aşkabat Bangkok Bişkek Cakarta Duşanbe Hanoiİslamabad Kabil Kuala Lumpur Manila Pekin Seul Singapur

AVRUPA/KAFKASYAAVRUPA/KAFKASYAABDTÖOECDAtina Bakü Belgrad Berlin Bern BratislavaBrüksel Budapeşte Bükreş Dublin Helsinki Kiev Kişinev Kopenhag Lahey LizbonLefkoşa

Londra LubliyanaMadrid Minsk MoskovaOslo ParisPodgoricaPragPriştineRomaSaraybosna Sofya Stokholm TiflisTiran Üsküp Varşova Viyana Zagreb

BarselonaBatumDüsseldorfHamburgHannoverKazanMarsilyaMilanoMünihNovorossiskOdessaRotterdamSelanikSt. PetersburgStutgartBirminghamKrasnodarNovosibirskYekaterinburg

Taşkent Tokyo Ulan Bator Yeni Delhi AlmatıGuangzhouHong Kong KaraçiMumbaiŞangayGeorgetown

AbujaAddis Ababa AkraCezayirDakarDarüsselamHartumİskenderiye

Buenos Aires KarakasMexico CityOttavaSantiagoVaşingtonHoustonLos Angeles

AMERİKA

ORTA DOĞUORTA DOĞUAbu Dhabi Amman BağdatBeyrutDohaKuveytManama

MuskatRiyadSana ŞamTahranTel Aviv Basra

CiddeDubaiErbilHalepKudüsMusulTebriz

SidneyMelbourne

AVUSTRALYAAVUSTRALYA

New YorkSao PauloŞikagoTorontoMiamiSan FranciscoSeattle

GEORGETOWN

Locations of Trade RepresentativesLocations of Trade Representatives


• Export Oriented Production Strategy and Input Supply Strategy

• Market Access Strategy• Supporting Exports • Trade Remedies• Restructuring the Incentive System• Improving the Investment Climate• Trade Agreements• Next-Generation Free Zones• Trade in Services and Turkish Investments Abroad • Market Surveillance and Inspection• Strengthening the Organization Abroad

Projects with Future ProspectsProjects with Future Prospects


Documents

MINISTRY of ECONOMY ECONOMIC OUTLOOK MAY 2012 Economic Outlook is revized in the 1st and the 3rd weeks of the month. Recent Update:05/07/2012 May 2012