Alpaslan ÇAKAR

Chairman of the Board of Directors

In the global economy, recession concerns and apprehension about the current course of inflation are expected to be the main items under the spotlight in 2024.

The year 2023 was dominated by the efforts to tackle inflation, heightened geopolitical risks, the energy crisis, bank bankruptcies, the tightening steps taken by central banks and expectations of recession. Central banks continued to tighten their monetary policies throughout the year, while steps towards loosening are expected to begin in 2024, depending on economic indicators. In the global economy, recession concerns and apprehension about the current course of inflation are expected to be the main items under the spotlight in 2024.

While the US economy suffered from a slowdown in growth and high levels of inflation caused by imbalances in supply and demand in 2022, in 2023 attention turned to the swelling general government debt burden and debt dilemmas, economic stagnation and the efforts to fight inflation. The US Federal Reserve (Fed), which continued to raise interest rates until the last quarter of the year, maintained its policy rate at 5.25 - 5.50% in the last meeting of the year. In its most recent guidance, Fed officials indicated the policy rate may be cut in 2024, but warned of the possibility of an additional rate hike despite the continuing decline in the annual rate of inflation.

While the spotlight in the European economy was on rising energy prices and the increase in cost inflation following the outbreak of the war between Russia and Ukraine in early 2022, the positive results of the measures taken in 2023 were apparent with lower energy prices in the last quarter. While the European Central Bank (ECB) left the policy rate unchanged at 4.50%, the ECB emphasized that while the interest rate hikes had the desired effect, fiscal tightening would continue with any cuts in interest rates being data-driven.

Developing countries sought to ensure financial stability during 2023. The economic recovery in China continued in the wake of the pandemic, with the country resorting to interest rate cuts in 2023 in a bid to stimulate economic activity. Despite this, there have been mounting concerns in China that fiscal incentives would not be provided to the economy, having a negative impact on the markets.

In Turkey, the year was marked by efforts to curb inflation risks and tame expectations, support the Turkish lira and gradually exit exchange rate-protected deposits starting from the second half of the year. The Turkish Central Bank raised the policy interest rate from 40% to 42.50% in December, while the inflation figures announced in November were consistent with the Central Bank’s inflation report.

Turkish Monetary Policies
In Turkey, the year was marked by efforts to curb inflation risks and tame expectations, support the Turkish lira and gradually exit exchange rate-protected deposits starting from the second half of the year. The Turkish Central Bank raised the policy interest rate from 40% to 42.50% in December.

The share of participation banking in the financial sector increased from 8.3% at the end of last year to 8.64% as of November. Maintaining this positive performance is of tremendous importance in deepening our country’s financial system and rendering it more resilient against risk.

Ziraat Participation commanded a share of 18.8% in the participation banking sector at the end of 2023. Ziraat Participation will continue to support the economy with a customer-oriented approach in accordance with the principles of profitability and efficiency, as well as expanding its service network in the coming period.