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Message from the Chairman
Global-growth and terms-of-trade did not meet the
expectations in 2016.
As a year that was characterized by a dizzying pace of
economic and political developments, 2016 was witness to an
array of momentous breakpoints, particularly the UK’s decision
to leave the European Union in its “Brexit” referendum and the
largely unexpected outcome of the US presidential elections.
It appears that the global economy failed to grow enough in
2016 and that global trade was at its lowest level within recent
years.
As US growth continued to gain momentum, the US Federal
Reserve Bank reached the opinion that the growth was indeed
sustainable and therefore not only raised interest rates but also
announced its interest rate projections including a rise for the
period ahead. This was a crucial signpost pointing to the future
course of the global economy.
Although the US economy’s modest recovery and growth
performance does inspire hope, low inflation and a persistently
low propensity to consume keep the possibility of a need for
more reflation firmly on the agenda. Furthermore concerns
about the banking system remain just as valid as ever.
Despite recovery in developed countries in 2016, uncertainties
as to global monetary policies continued to fuel volatility in
financial markets, which in turn had an adverse impact on
developing countries’ asset prices and risk premium indicators.
The currencies of the countries in this group suffered as a result
and the erosion in their value speeded up even more in the
aftermath of the US election results and the Fed’s decision to
raise rates.
The non-bank financial sector continues to grow.
The Turkish non-bank financial industry, the members of which we represent as the Association of Financial
Institutions, increased its consolidated assets by 19%, its consolidated receivables by 20%, and its consolidated
equity by 15% on average every year between 2006 and 2016.
Mehmet Cantekin
Chairman
Annual Report 2016
The Association of Financial Institutions
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