Dear Stakeholders,

The course of the pandemic has been the main determinant of global economic and financial developments.

2020 agenda of global economy centered on the measures countries were compelled to implement in response to the COVID-19 pandemic that emerged in China and quickly spread across the entire world. While the pandemic brought along an unprecedented economic contraction on a global scale particularly in the second quarter of 2020 on supply and demand alike, it also led to significant decline in production and trade volumes.

Although economic activity began to recover more strongly than anticipated in connection with the normalization steps taken in the third quarter of the year, the number of cases that readopted an upturn and the mutated variants of the virus in the last quarter put downward pressure on macroeconomic outlook once again. While the vaccine procurement issue and additional restrictive measures numerous countries introduced in an attempt to prevent the spreading of the mutated virus restrained optimistic anticipations to some extent, the vaccination campaigns continuing at a high pace around the World since the start of 2021 positively affect the projections for the period ahead.

The IMF updated its estimations regarding the world economy in its report dated January 2021, and revised its estimated contraction of 4.4% for 2020 as 3.5% in connection with a better-than-expected revival in global economic activity in the second half of the year. Due to the base effect, the IMF projects a 5.5% global growth for 2021.

Increasing coverage of vaccination indicates that a more positive Outlook can be held for 2021.

Amid the prevailing conditions imposed by the pandemic, the Turkish economy also had a tough year as did the rest of the world. Having grown 4.5% in the first quarter of the year, the economy shrank by 9.9% in the second quarter when the impacts of the pandemic weighed down most powerfully, whereas it took a sharp reversal to 6.7% growth in the third quarter when the economic and physical measures began to yield positive results.

The inflation rose as a result of the measures introduced to give momentum to economic activity through the government at the inception of the pandemic. The CBRT’s postponement of its decision to tighten its monetary policies has been another factor to escalate inflation. As the CPI inflation ended the year at 14.60%, the greatest contributors to inflation have been food and transport prices.

On another note, exchange rates maintained their uptrend due to the accelerated foreign capital outflows and dollarization within the country. The foreign trade deficit expanding in connection also with the gradually broadened restrictive measures in European countries that represent our most important export market, and the plummeted transport and tourism revenues remain as pressure elements upon current account balance.

Although the economic activity that had gained momentum reverted to its negative course as the second wave of the pandemic hit in November, developments related to the increasing coverage of  vaccination campaigns indicates that a more positive outlook can be held for 2021.

The sector had a stagnant year due to the pandemic.

Despite the regulations introduced to eliminate the negative impacts of the pandemic, the retail and office markets suffered from performance loss as a result of social measures, and decline in onsumers’ income and spending trends.

Following a negative course resulting from the pandemic, residential sales revived with the lower interest rates in the summer; however, a downturn ensued in the final months of the year as interest rates increased once again.

We are going to overcome this rough patch through sustainable and effective actions.

As the whole world, we are going through a rough patch that is testing us in every respect. During this process, we have had the most realistic experience as to the extent uncertainties or unforeseen factors can affect our routines. On the other hand, the new experiences we have acquired in the wake of the pandemic gave us the opportunity to be prepared for similar periods. Inasmuch as the whole World put up an enormous fight throughout the pandemic, recognizing that recovery will not be as fast and strong as its outbreak, we are going to overcome this rough patch with the help of sustainable and effective actions.

On behalf of our Board of Directors and myself, I would like to thank all our stakeholders who are getting ready with us for a better future with the values we create.


Sezgin Yılmaz