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Contents
1.
OVERVIEW
1.1. Monetary Policy Implementation and Monetary Conditions
1
1.2. Macroeconomic Developments and Main Assumptions
4
1.3. Inflation and Monetary Policy Outlook
8
1.4. Risks and Monetary Policy
2.
3.
4.
5.
6.
7.
1
INTERNATIONAL ECONOMIC DEVELOPMENTS
9
11
2.1. Global Growth
12
2.2. Commodity Prices
14
2.3. Global Inflation
17
2.4. Financial Conditions and Risk Indicators
18
2.5. Global Monetary Policy Developments
22
INFLATION DEVELOPMENTS
33
3.1. Inflation
33
3.2. Expectations
41
SUPPLY AND DEMAND DEVELOPMENTS
47
4.1. Gross Domestic Product Developments and Domestic Demand
48
4.2. External Demand
52
4.3. Labor Market
56
FINANCIAL MARKETS AND FINANCIAL INTERMEDIATION
75
5.1. Financial Markets
75
5.2. Financial Intermediation and Loans
84
PUBLIC FINANCE
101
6.1. Budget Developments
102
6.2. Developments in the Debt Stock
105
MEDIUM-TERM PROJECTIONS
109
7.1. Current State of the Economy, Short-Term Outlook and Assumptions
109
7.2. Medium-Term Outlook
112
7.3. Risks and Monetary Policy
116
BOXES
Box 2.1. December 9 Decisions and the Euro Area Debt Crisis
26
Box 2.2. Possible Impacts of Soaring Public Spending in the MENA Region on
Crude oil Prices
29
Box 3.1. Analysis of Underlying Inflation by Principal Components
43
Box 4.1. A Real-Time Business Cycle Indicator for Turkey
60
Box 4.2. Recent Developments in the Demand Composition
63
Box 4.3. A Sectoral Look at the Import Coverage Ratio of Exports
66
Box 4.4. A Comparison of the Recent Unemployment Rates to 2005-2007 Period by Sectoral
Employment Dynamics
Box 5.1. The Liquidity Management in the Recent Period and Its Consequences
Box 5.2. Changing Role of the Monetary Policy in the Aftermath of the Global Crisis
70
90
94
Box 7.1. Sources of Revisions to end-2011 Forecasts
118
Box 7.2. The Role of Base Effects on the CPI Inflation in 2012
123