International credit rating agency Moody’s announced that Turkiye’s credit rating outlook could be turned positive if the tight monetary stance is maintained.
Moody’s published its “Credit Opinion” report on the Turkish economy.
The report stated that the return to more orthodox policies after the May elections was positive in terms of credit, and noted that it would take time to reduce important macroeconomic imbalances.
The report pointed out that monetary tightening also increases the possibility of reducing Turkiye’s external imbalance and restructuring the central bank’s foreign exchange reserves, and that these will reduce the country’s vulnerability to external shocks.
The report states that the credit rating outlook can be turned positive if the tight monetary stance is maintained and wage agreements are compatible with the CBRT’s goal of significantly reducing inflation. It was noted that further evidence of a reduction in the current account deficit and higher levels of foreign exchange reserves would be positive for the credit rating, especially if these trends were the result of an improvement in the country’s external competitiveness and sustained capital inflows.
The report stated that the Turkish economy is expected to grow by 4% this year, 2.5% next year and 3% in 2025.
The report states that the average inflation in the country is estimated to be 53.5% this year, 58.9% next year and 39.1% in 2025. It was noted that the ratio of Turkiye’s current account deficit to gross domestic product (GDP) is predicted to be 4.7% in 2023, 3.4% in 2024 and 3% in 2025.
Source: Trthaber / Prepared by Irem Yildiz