MILLI REASURANS ANNUAL REPORT 2018

Milli Re Annual Report 2018 Financial Status / 45 Fluctuations in global financial markets expected to rule in 2019 as well. Rising protectionist tendencies increased global uncertainty about economic policies and emphasised the downside risks with respect to global growth outlook while IMF made a downward revision in its global growth forecast for 2019 by 0.2 points. After Fed’s 2018 December meeting, markets lowered their 2019 forecast for the total number of interest rate hikes from 3 to 2, while expectation that Fed would keep downsizing its balance sheet prevailed. Fed’s announcement that it would be more flexible and patient with monetary policy decisions strengthened the expectations that it could pause interest rate hikes in 2019. Leading indicators in Euro Zone point out to the fact that downward risks could carry forward to 2019 while modest slowdown in the region could last longer than expected. Developments such as slowdown in the economic growth, decreasing oil prices as well as the inflation deviating far from the expectations signal that ECB would keep supporting the economy. In a nutshell, the expectations that ECB would keep the interest rates on hold until 2020 became more prominent considering the fact that it did not raise the rates since 2011. The general economic slowdown during the year spread over to majority of the sectors. Based on the chain linked volume index, GDP increased by 2.6% at the end of the year compared to the previous year. Gross Domestic Product (GDP) based on industrial production index increased by 19.1% based on current prices, reaching TL 3,701 billion. The general economic slowdown has spread over to the majority of the sectors; both on a yearly and quarterly basis, the contribution of all the main sectors to the economy declined considerably while agriculture sector remained as an exception to this trend. The services industries remained to be the main contributor to the annual economic growth, mainly driven by the strong recovery in tourism sector. 7.4 2017 2.6 2018 8.5 2016 GDP Growth Rate- Based on Current Prices (%) 234 2017 223 2018 199 2016 Imports (USD billion) 157 2017 168 2018 143 2016 Exports (USD billion) 19.1% Gross Domestic Product (GDP) based on industrial production index increased by 19.1% based on current prices, reaching TL 3,701 billion.