Then, I will briefly touch upon the exit strategy, the details of which were shared with the public last week, for gradually withdrawing measures taken during extraordinary circumstances. IV. Inflation developments and monetary policy implementations  31. As I have also mentioned at the beginning of my speech when evaluating the global economic developments, inflation rates saw dramatic declines on a global basis due to rapidly contracting economic activity and plunging commodity prices as of the last quarter of 2008. During this period, a similar pace was observed in Turkey regarding the inflation outlook. Despite the relatively sound structure of the Turkish financial sector, our exports being composed of mainly products sensitive to foreign conjuncture; the sensitivity of production to global credit conditions and high level of capacity at the onset of the crisis have deepened the contraction in economic activity. During this period, in addition to tightness in financial conditions, a sharp contraction in domestic demand was also experienced due to prevailing perception of uncertainty and increased precautionary savings. Furthermore, temporary tax incentives for stimulating the domestic demand led inflation to fall faster-than-  BIS Review 68/2010  11  expected in the first half of 2009. Consequently, the inflation rate remained below the announced target-consistent-path, in June. 32. As I have previously mentioned, as the pace of recovery in the global economy became more pronounced, the risk appetite in global financial markets started to boost as of the second half of 2009. Accordingly, emerging markets attracted more capital through increased portfolio movements.
Meanwhile, the positive contribution of the increased net exports as a result of the reduced demand for imports partially limited the slowdown of growth in 2009. BIS Review 68/2010  GDP Growth Rates GDP Growth Rates  Gross Domestic Product  (Annual Percentage Change)  (Seasonally Adjusted)  10  27  5  24 0  -5  21 -10  18  -15 1  2  3  4  1  2  2006  3  4  1  2  2007  3  4  1  2008  2  3  1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 12 3 4 1 2 3 4  4  2009  2003  Source: TURKSTAT. 2004  2005  2006  2007  2008  2009  Source: TURKSTAT, CBRT. 17. The transformation that the Turkish economy has undergone in the post-2001 period has caused major changes in the employment structure. The share of the agricultural sector in employment was 35 percent in 2002, while, this ratio fell to around 23 percent in 2007. However, with the recent economic slowdown, this trend reversed temporarily and the share of agricultural sector in employment increased to approximately 25 percent in 2009. 18. While global turmoil took a heavy toll on industrial employment, it had a scant impact on employment in construction and services sectors.