MILLIRE_2019_Annual Report

Milli Re Annual Report 2019 42 0.9 7.4 2017 2018 2019 2.6 GDP Growth Rate- Based on Current Prices (%) 0.9% 203 234 2017 2018 2019 223 Imports (USD billion) 203 172 157 2017 2018 2019 168 Exports (USD billion) 172 Expectations for the future Global economy is projected to gain momentum depending on the recovery in developing countries. While China, having substantial impact on the global economic growth took some measures in order to foster the economy, new employment stimulus package has been announced at the beginning of the year. While the economic uncertainty in developed and emerging economies is expected to disperse as Phase One of the trade deal which is being negotiated between US and China was signed at the beginning of 2020, the concerns caused by the Coronavirus that emerged in Chinese city of Wuhan became a hot topic in global economic agenda as the virus spread rapidly despite the quick measures taken by the government. As many global companies operating in China as well as local companies had to suspend their production activities due to the epidemic, it is expected that China’s economic growth performance will be disrupted significantly, especially in the first quarter of 2020. In addition to the negative impacts of the coronavirus on the global economic activity, developments associated with the trade relations, phase two of the negotiations between US and China which turns into a battle for technological supremacy, US presidential elections in November as well as the geopolitical risks would continue to be decisive in global risk perception in 2020, as it was in 2019. Nonetheless, as global liquidity conditions started to give recovery signals with the support of expansionary monetary policies, the capital flows to developing countries are expected to intensify. On the other hand, the Brexit process which started with a referendum in June 2016 came to a conclusion on 31 January 2020, while the UK would be keeping its status in the single market and custom union during the transition period which will last until the end of the year. However, the negotiation process between the EU and the UK in order to come to an agreement on various subject matters, trade in the first place, is expected to be very challenging. Rebalancing in the economic activity became prominent Turkey’s economy, which started contracting in the last quarter of 2018 and continued to shrink during the first two quarters of 2019, recovered faster than expected and registered 1% and 6% growth for the 3 rd and 4 th quarters respectively. On an annual basis, Turkey’s economy grew by 0.9% in 2019. In the first two quarters, net export has been the main contributor to the economic activity, yet the decline in investment expenditures, construction investments in particular, suppressed the growth significantly. Although the contribution from net export turned negative in the third ECONOMIC OUTLOOK