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Chairman’s
Message
he world economy was beset by levels of geopolitical
risks and international uncertainties in 2014 that we
have not witnessed for many years. However, Turkey
produced relatively stable economic performance
despite two difficult nationwide elections and the
shadow of regional geopolitical risks.
Against this background, we made significant advances towards
becoming a global corporation in 2014. Coinciding with our 70th
anniversary, these developments strengthened our commitment
to becoming a Turkey based multicultural corporation active on
five continents within ten years.
Developments Overshadowing the World Economy
Four important developments marked the world economy in
2014. First, the US distanced itself from the economies of other
developed countries in terms of employment and inflation. This
gave the Federal Reserve room to prepare to raise interest
rates, which is the next step towards normalization of US
monetary policy. Second, the decision of Greece to go to early
elections, together with an already weak economic outlook and
the necessity to impose new austerity measures, made the
associated risk a major concern for Europe once again. Third,
long simmering geopolitical risks in our region exploded and
grew. Fourth, changing petroleum supply balances caused a
rapid, sustained drop in crude oil prices.
The US economy returned to sustainable growth after a long
hiatus. While contracting 2.1% in the first quarter of 2014 due
to extraordinary winter conditions, the US economy grew by a
phenomenal 4.6% in the second quarter, and 5% in the third
and ended the year with an annual growth rate 2.4%. The
IMF projects that the US economy will consolidate its existing
performance to grow by 3.6% in 2015. Adding to these positive
developments in economic growth and the rapid recovery
in employment and wages, 2014 saw the return towards
normalization of US monetary policy. Following all these events,
even if the FED takes only minimal actions in 2015, it has
indicated that it will raise interest rates and that the future could
see further significant changes in the financial context.
In contrast to events unfolding in the US economy, the EU
economy continues to suffer. While Euro Zone economies
grew in 2014, albeit weakly, they had to contend with deflation.
Unfortunately, the measures taken to address the situation have
Dear Shareholders,
A. AHMET KOCABIYIK
A. Ahmet Kocabıyık
Chairman of the Board
Borusan Holding
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