MILLI RE 2020 ANNUAL REPORT

Financial Status Risks and Assessment of the Governing Body Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon Consolidated Financial Statements Together with Independent Auditors’ Report Thereon Milli Re Annual Report 2020 11 Despite the social and economic disruption caused by the pandemic, the lessons learned and gains achieved during these challenging times along with the rapid developments in the scientific field raise hopes and positive expectations for the future. As a response to these adverse developments in 2020, in order to mitigate the negative impacts on the economy, central banks and financial authorities continued to implement extensive measures throughout the year. During this process, central banks in developed countries provided significant amounts of liquidity to the markets with large asset purchases along with their low interest rate policies. The Federal Reserve (Fed) reduced the policy interest rate to 0.50%- 0.75%, which was between 1.50% and 1.75% at the end of 2019, and then to 0.00% -0.25%. On the other hand, steps have been taken in order to meet short-term liquidity needs with the treasury and corporate bond purchases. The European Central Bank has increased its asset purchases while keeping the deposit interest rate fixed at -0.50%. Similarly, as a result of the monetary expansion policies of the Bank of England and the Bank of Japan, a growth of around USD 8 trillion was achieved in 2020 balance sheets of the four major central banks. Despite the social and economic disruption caused by the pandemic, the lessons learned and gains achieved during these challenging times along with the rapid developments in the scientific field raise hopes and positive expectations for the future. In consideration of the changes in economic and social life which came along with the Covid-19 outbreak, it is considered that 2021 will be the year of countries that effectively use their resources. As it has been the case for the rest of the world, 2020 has been a challenging year for the Turkish economy as a consequence of the pandemic conditions. The economy, which grew by 4.5% in the first quarter of the year, contracted by 10.3% in the second quarter, the time period during which the impacts of the pandemic reached its peak, and recorded 6.3% growth in the third quarter with a sharp turn, as the economic measures taken started to show results. With 5.9% increase in the fourth quarter of the year, the annual GDP growth is recorded as 1.8% in comparison with the previous year.