Alpaslan ÇAKAR

Chairman of the Board of Directors

In 2022, among the main topics of the global economy were increases in energy and food prices due to Russia-Ukraine war, inflationary pressures, recession expectations and aggressive tightening steps of central banks. As expansive monetary and finance policies of large scale applied to activate economies became one of the main factors of inflation, leading central banks ceased expansive monetary policies and started implementing tightening monetary policies. Although it was thought that inflation was only temporary at the global economy, it became quite high when compared with prior year averages and this shows that concerns about the current course of inflation may continue in 2023.

While USA economy recovered in 2021, slowing of growth rate in 2022 brought concerns about recession into the agenda. US Central Bank (Fed) started tightening steps starting in the first quarter of 2022 to prevent excessive heat in the economy and to fight against inflation. During the year, monetary policy was tightened even more by making higher interest increases and starting to decrease the balance sheet. Hence, Dollar index (DXY) increased in 2022. Unemployment rates in the USA somewhat continued the decreasing trend in 2022 which started in 2021 and work force market is being closely monitored. To eliminate the contraction in labor market, the need for slowing the economy stands out, accordingly it is expected that wage trends decrease consistently with inflation and as a result loss of labor is realized. High wages create pressure on companies’ cost of labor force and as a result on inflation. In this context, not only the impacts of Fed’s monetary policy on USA economy which will be implemented in the following period but also its impacts on developing countries in particular is closely monitored.

European economy demonstrated a partial improvement in 2021 with the mobility in global economy. However, the rising energy prices with the Russia- Ukraine war which started at the beginning of 2022 caused a significant increase in cost inflation in the European continent. While ceasing the asset purchase program, European Central Bank (ECB) increased interests significantly to fight against inflation. Moreover, production sector PMI index in 2022 going down below 50 points which is the growth threshold value increased concerns of economic slowdown in Euro Zone.

Cruising of employment at higher rates than previous year averages and continuance of upward acceleration of exports and economic growth had significant roles in Turkish economy’s shape in 2022. However, on a global scale, increasing commodity costs due to Russia-Ukraine war and continuing supply problems caused higher than expected inflation rates. Various economic programs were implemented to take increases in inflation rates under control and to support Turkish Lira. While economic growth is expected to continue in the following period, temporary increase in inflation is expected to decrease. Furthermore, with the contribution of tourism sector which gained a good acceleration, improvement process in current account balance is expected to continue in 2023.

Being the first public participation bank of Turkey, Ziraat Participation continues branching to provide access to participation banking in more regions of our country.

Ziraat Participation conveys domestic and foreign resources to our economy to areas which will provide the highest added value and supports the deepening and development of our financial system. In this context, while the Bank supports the participation banks’ share in the finance industry each year, it also increases its own share in the industry. Funds collected continue to be the main funding source and used primarily in the financing of the real sector.

Focusing primarily on Turkish Lira financing of the real sector, in 2022, funds extended in TL increased by 149% and real sector financing in TL increased by 164%.

Being the first public participation bank of Turkey, Ziraat Participation continues branching to provide access to participation banking in more regions of our country. In 2022, we opened our 156th branch. In the following period, we will continue branching within the framework of efficiency principles, providing effective financial solutions to our customers with a customer-oriented approach at all our service points and to support participation banking sector and our economy more.

Before finishing my message, I would like to express my condolences to our citizens who lost their lives in the devastating earthquake disaster with the epicenter of Kahramanmaraş as we were in the process of preparing our report. My deepest sympathies are with their families and our nation.