We leave 2016 behind as a year which has been tough, both for global economy and Turkish economy. The base effect for oil and commodity prices ended in the last quarter of 2016. This means that the major cause in global trade decline has worn off. At the same time, with oil prices starting to increase recently, the shakedown in oil exporting countries’ economies is coming to an end.

There are problems in the recovery of the global economy following the Great Recession. Last year, because of the increase in US dollar, many countries’ currencies depreciated against US dollar, especially emerging economies. This caused a deterioration in the economic indicators of many countries. At the same time, global trade declined severely due to the appreciation of US dollar, declining to levels before the Great Recession.

These troubles from last year have also affected 2016. Because of these problems, in 2016, with the effect of the decline in the growth of emerging economies, especially China, Russia and Brazil, global economic growth is declining. Global trade is also similarly decelerating. According to estimations, growth in global trade in 2016 will be the lowest of the last 15 years, excluding the Great Recession.

The Turkish economy is also being affected by the negativities in the global economy. Although the Turkish economy showed a good performance in the first half of 2016, for the remainder of the year our growth is slowing down especially due to losses in tourism. As was the case last year, Turkey’s exports are decreasing in 2016 because export prices are declining, due to decreases in oil and commodity prices. Moreover, losses in tourism also cause net exports to contribute negatively to Turkey’s growth. Due to developments throughout the year, the growth estimation for Turkey in 2016 was decreased from 4.5% to 3.2% in the Mid-Term Plan.