November 05, 2019 (AO) – Turkey is to conduct five offshore drilling rounds for oil and natural gas in 2020, including in marine license areas of the Turkish Republic of Northern Cyprus (TRNC), according to the Annual Presidential Plan 2020 published in yesterday’s Official Gazette. The plan aims to include the carrying-out of 3,000 kilometers worth of two-dimensional and 20,707 kilometers worth of three-dimensional seismic exploration activity.
As part of the program, extensive research activities in shale and methane gas and the drilling of five nontraditional wells in this area are expected to take place.
TL 13.9 billion worth of public investment in the energy sector is envisaged to be spent over the course of the year, making energy the second highest area of public investment after transportation in 2020.
According to plans specified by the energy and mining sector in the 2020 Annual Presidential Program, Turkey’s electricity demand is expected to increase to 329.6 billion kilowatt-hours (kWh) in 2020. This year’s electricity demand is expected to have come to 315.2 billion kWh.
The share of the natural gas projected as 29.5% in electricity production in 2019 is expected to decrease to 27.2% in 2020. The share of renewable energy sources in electricity generation is expected to climb to 36.4% in 2020.
Within the scope of targets to increase the share of renewable energy sources in electricity generation, studies are going to be carried out on mini renewable energy resource areas (YEKA) projects that will be implemented as a new model.
Turkey’s apparent lignite reserve is expected to increase to 19.3 billion tons. In line with efforts to increase the use of domestic coal in electricity generation, reports on resources and reserves will be prepared prior to the tenders for the construction of power plants in Eskişehir-Alpu, Thrace-Ergene, Afyon-Dinar, Afşin-Elbistan and Karapınar-Ayrancı fields being released. Plans have been laid to drill 60,000 meters in the Eskişehir-Alpu field in 2020 to identify and develop reserves.
Within the scope of the mining fields to be added to the economy, mining exports are expected to reach $5.2 billion by 2020. Furthermore, with these increases, the ratio of mining value-added to gross domestic product is envisaged to rise to 1.05%. This rate was estimated at 1.02% for 2019.
The first unit of the Akkuyu Nuclear Power Plant (NPP) is planned to go into operation in 2023, while other units will go into operation by the end of 2026, one year apart.
In terms of natural gas, LNG storage and gasification unit (FSRU), which can be shipped to export markets via port, will be received to complete the testing and acceptance procedures. This has been conducted with the aim of increasing the diversity of Turkey’s energy resource and resource routes. Current plans also outline the signing of the contract to connect the FSRU to the transmission network to be commissioned in the Gulf of Saros and the subsequent construction works.
GDP GROWTH ESTIMATED AT 5%
Technical factors, such as interest rate cuts initiated by the Central Bank of Republic of Turkey (CBRT), declining inflation, relatively low exchange rate fluctuations, policies aimed at increasing the credit volume led by state banks and the positive base effect from the second half of last year are considered among the determining factors for a steady recovery.
Gross domestic product (GDP) is expected to grow by 0.5% throughout the year, with the anticipation of a strong growth rate in the last quarter. The plan forecasts that the Turkish economy will register a 5% expansion next year, of which private consumption expenditures will contribute 3.1 points and that private sector fixed capital investment expenditures will contribute 2.8 points. Over this period, public consumption expenditures are expected to contribute 0.3 points to growth, while the contribution of public sector fixed capital investment expenditures to growth is expected to be minus 0.4 points. The contribution of net exports of goods and services to GDP growth, on the other hand, is projected as minus 0.6 percentage points due to the increase in imports based on increasing domestic demand.
The ratio of public disposable income to GDP is envisaged at 9.7% in 2020. It is planned that public savings will be minus 1% and that public investments will be 2.7% in 2020 compared to the GDP.
Also, according to the program, the Consumer Price Index (CPI) is expected to be 12% at the end of the year. Monetary policy will be carried out within the framework of inflation, targeting in a way to ensure financial stability while strengthening coordination with fiscal policy and reducing consumer inflation to 8.5% at the end of next year with measures to be taken.
Next year, a general recovery is expected in the sectoral aspect. In this period, it is estimated that the increase in tourism revenues will continue, exports will retain their strength, and the increase in the industrial sector value-added will accelerate again with the efficiency-oriented policies implemented recently, and the agricultural sector value-added will perform better than the long-term averages with the measures to be implemented.
Thus, it is predicted that the industrial sector value-added will increase by 6 %, the services sector value added by 5%, and the agricultural sector value-added by 4%. As a result, GDP is expected to grow by 5% in 2020. Capital stock and employment are expected to contribute mainly to growth, while the contribution of total factor productivity is expected to remain positive.
In 2020, employment growth is expected to gain momentum within the framework of the economic recovery process and high growth rates. Employment is expected to increase by 1.1 million compared to the previous year, while unemployment is expected to decline to 11.8%. The labor force participation rate is expected to increase by 0.6 percentage points to 53.4%.
CURRENT ACCOUNT DEFICIT TARGET
With the change in the composition of demand as a result of next year’s economic recovery, the country;’s current account balance is expected to provide a deficit that will keep external finance requirements at reasonable levels. Over this period, the decline in the country’s risk premiums, together with the decline in inflation, is expected to be the main determinant of external financing by creating a favorable environment for quality capital inflows. In 2020, the General Trade System (GTS) defined exports are predicted to rise by 4.7% to reach $190 billion, while GTS defined imports are expected to drop by 11.4% to $231.5 billion. Thus, the GTS defined foreign trade deficit is projected to drop to $41.5 billion.
It is estimated that travel revenues will be realized as $34.3 billion in 2020 and that the balance of services will provide a surplus of $31.4 billion. The primary income balance is projected to have a deficit of $13.4 billion, while the secondary income balance is projected to produce a surplus of $1.2 billion. Under these assumptions, the current account deficit is expected to rise to $9.6 billion in 2020, and the ratio of the current account deficit to GDP is expected to reach 1.2%.
Source by: Daily Sabah