MILLI_RE_ANNUAL REPORT 2022

In 2022 the Turkish economy grew by annualized rates of 7.5% and 7.7% respectively in the first and second quarters of the year. The main contributors to first-quarter growth were services and manufacturing, but private consumption also made a strong contribution, particularly in relation to services. Two other components of first half-year growth were an uptick in domestic demand prompted by inflationary expectations and by improvements in net external demand. Growth continued in the third quarter albeit at a much reduced (3.9%) rate but this was in line with markets’ expectations. Although private consumption continued to support growth, the contribution made by net exports was lessened by weakening demand in the country’s export markets. In the fourth quarter, the slowdown in growth became even more pronounced although the rate still managed to remain at 3.5%. The upshot is that, having grown by 11.4% in 2021, the Turkish economy achieved a better-than-anticipated performance and grew by 5.6% in 2022. CPI inflation continued to rise all year long as higher exchange rates at home and higher energy and food prices worldwide were reflected in consumer prices. CPI inflation peaked at 85.51% in October and ended the year at 64.27%, its lowest level in any quarter other than the first. Twelve-month D-PPI inflation closed the year at 97.72%–the lowest level since January 2022. In the first two quarters of 2022, CBRT left its policy rate unchanged at 14%. In August however the bank began lowering lending rates in a bid to support economic growth and especially the country’s export trade. In a series of steps that took place in the course of four consecutive Monetary Policy Committee meetings, the central bank policy rate was reduced by 500 basis points to 9%. In 2022 Turkey’s current account deficit grew by about sevenfold to USD 48.8 billion while its net energy imports approximately doubled. CAD expansion was constrained somewhat by a rise in net services, which performed well in response to Economic Review CPI INFLATION ENDED THE YEAR AT 64.27%. 64.27% 2020 2020 2020 1.8 209 161 2021 2021 2021 11 271 226 2022 2022 2022 5.6 364 254 GDP GROWTH RATE – BASED ON CURRENT PRICES (%) IMPORTS (USD BILLION) EXPORTS (USD BILLION) Source: TurkStat, CBRT, Ministry of Treasury and Finance ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES GENERAL INFORMATION FINANCIAL RIGHTS PROVIDED TO THE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RESEARCH & DEVELOPMENT ACTIVITIES 50 MİLLİ RE 2022 ANNUAL REPORT