Positive Upgrade for Turkey by S&P Global
Turkish economic developments have reached a new milestone. S&P Global, a leading data provider and credit rating agency, upgraded Turkey’s economic outlook from stable to positive on Thursday. This move affirms the country’s “B” credit rating and highlights the success of its economic policies.
Strategies to Cool and Rebalance the Economy
Turkey’s policymakers have effectively moderated the previously “overheated” economy. They have also successfully replenished the Central Bank’s net foreign currency reserves. These efforts reflect Turkey’s strong economic management.
Central Bank’s Decisive Interest Rate Hike
The Turkish Central Bank raised its policy interest rate by 31.5 percentage points since June. This critical step aims to slow and rebalance the economy. Since the third quarter began, it has led to a notable softening in consumption.
Fiscal and Current Account Deficit Forecasts
S&P Global predicts a lower-than-expected fiscal deficit for Turkey in 2023, at 4.3% of GDP. The agency also expects the current account deficit to narrow as imports decrease significantly in the year’s final months and into 2024.
Tighter Credit Conditions and Opportunities for Debt Issuance
Turkey is experiencing tighter credit conditions, with fiscal support gradually tapering off. Recent US dollar weakness and stabilized US interest rates have opened doors for Turkish corporates, banks, and the government to issue external commercial debt.
Visit Prestij Consulting’s blog for more on S&P Global’s revised outlook on Turkey’s economy and other financial news. To explore how these changes could impact your investments or to get expert financial advice, please visit our contact page.
