20180920-法国巴黎银行-Turkey__A_realistic_road_map_8页_457kb

Summary of "Turkey: A Realistic Road Map"

Core Content

The document presents Turkey's new economic programme for the period 2019-2021, outlining key macroeconomic forecasts and policy initiatives aimed at restoring fiscal discipline, stabilizing inflation, and improving the current account balance. The programme is described as realistic and achievable, with the success of its implementation being crucial for attracting investor confidence.

Main Objectives and Targets

• GDP Growth Projections:

  • 2019: 2.3%
  • 2020: 3.5%
  • 2021: 5.0%
    The growth is expected to gradually move toward a normal path, with export-led growth playing a significant role in 2019, followed by a shift toward domestic demand in subsequent years.

• Current Account Deficit:

  • 2019: 3.3% of GDP
  • 2020: 2.7% of GDP
  • 2021: Expected to remain at 2.6% of GDP
    The deficit is projected to decline significantly, which could reduce Turkey's vulnerability and attract investors.

• Inflation Forecasts:

  • 2019: 15.9%
  • 2020: 9.8%
  • 2021: 6.0%
    The 2019 forecast is considered slightly high due to low growth and tight monetary policy, but the subsequent declines are viewed as positive.

• Fiscal Discipline:

  • The government aims to achieve a primary surplus of 0.8% of GDP in 2019, increasing to 1.6% in 2021.
  • Total budget savings are expected to reach TRY 75.9 billion (1.7% of GDP) in 2019, primarily through expenditure cuts and revenue-enhancing measures.
  • Public debt to GDP is projected to fall from 31.1% in 2018 to 28.5% in 2019.

Key Policy Measures

• Export-led Growth:

  • Export growth is expected to be a key driver of the economy in 2019, contributing 1.5 percentage points to GDP.
  • This growth is anticipated to help reduce the current account deficit and improve the trade balance.

• Domestic Demand Contribution:

  • Domestic demand is expected to play a larger role in GDP growth from 2020 onwards, contributing 0.8 percentage points in 2019, 1.0 in 2020, and 1.3 in 2021.

• Social Security and Public Projects:

  • The government plans to revamp the social security system.
  • Unstarted public projects will be cancelled to reduce expenditure, and foreign direct investment will be sought for major infrastructure initiatives.

Investment Considerations

• The document emphasizes that proper implementation of the programme is essential for building investor confidence.
• A declining current account deficit is expected to make Turkey more attractive to investors.
• Global energy prices are identified as a critical factor that could impact the current account deficit in 2020.
• The programme is seen as a realistic path to economic recovery, with clear and achievable targets.

Legal and Regulatory Disclaimers

• The document is non-independent research and may be subject to conflicts of interest due to BNPP's involvement in investment banking and trading activities.
• It is intended for professional clients and relevant persons as defined under MiFID II and other financial regulations.
• No investment advice is provided, and the document does not constitute a prospectus or public offering.
• Confidentiality is emphasized, and the document should not be used or shared without prior written consent from BNPP.
• Risk warnings are included, highlighting the potential volatility and risks associated with the financial instruments discussed, such as options, ETFs, and convertible securities.

Conclusion

The economic programme for Turkey is viewed as a realistic and achievable roadmap for 2019-2021, focusing on restoring fiscal discipline, reducing the current account deficit, and managing inflation. The success of this plan will depend on its effective implementation and the recovery of key sectors such as tourism and exports. The document serves as a market communication rather than investment advice and is subject to legal disclaimers regarding its use and distribution.