Late last year we outlined nine key themes for Emerging Europe in 2014, two thirds of which have already played out (or are currently playing out). Of the remaining views, we believe one - Turkey's growth slowdown - is still likely to occur by year-end, while the other two - populism in EU elections and modest attempts at liberalisation of the Russian economy - appear wrong.
The Turkish economy has proved more resilient than we initially anticipated, with real GDP growth coming in at 4.3% y-o-y in Q114. However, the trends we expected are playing out, and with substantial headwinds still facing the Turkish economy we still expect a more pronounced slowdown in the coming quarters. Domestic demand growth was very weak in Q114, with net exports and a substantial contribution from government expenditure propping up the headline figure. Private consumption growth fell to its lowest level since 2012, and we see further downside as consumer credit growth continues to rapidly decelerate.
Meanwhile, anti-government protests have remained a regular fixture of Turkey's social and political landscape so far this year, with the Soma coal mine disaster on May 13 just one example of a recent catalyst for renewed bouts of nationwide unrest. However, increasingly heavy-handed dispersion tactics, and the AKP's continued political dominance, appear to have reduced the turnout and frequency of such events.
We are anticipating strong growth at most of Turkey's largest ports this year with the port of Ambarli set to see year-on-year (y-o-y) gains of 9.70% in tonnage throughput, while box throughput will come in at a slightly lower 8.56%. Meanwhile, the port of Haydarpasa is pencilled in to see double-digit y-o-y tonnage throughput growth. The port of Izmir, however, is set for more modest growth (2.00% y-o-y tonnage throughput).
Headline Industry Data
• 2014 port of Ambarli tonnage throughput is forecast to grow 9.70%; over the medium term to 2018 we project average annual growth of...