International credit rating agency Standard & Poor’s (S&P) revised Turkiye’s credit rating. It changed Turkiye’s credit rating outlook from stable to positive.
Due to recent policy regulations in Turkiye, S&P went to an off-calendar assessment and revised the country’s credit outlook.
In the statement made by the organization, it was emphasized that while policy makers are making progress in cooling the overheated economy, the Central Bank of the Republic of Turkiye (CBRT) is slowly rebuilding its depleted net foreign exchange reserve stock.
In the statement, which pointed out the interest rate increases made by the CBRT since June, it was emphasized that the country’s twin deficits also decreased.
In the statement, it was stated that the 2023 budget deficit is expected to be lower than the targeted rate of 4.3% of the gross domestic product (GDP), and that the current account deficit is expected to gradually narrow with the sharp decrease in imports.
In the statement, it was noted that Turkiye’s credit rating was confirmed as “B” and the credit rating outlook was changed from “stable” to “positive”. It was stated that the long-term country rating could be raised one notch if the balance of payments improves further, foreign exchange reserves increase faster and dollarization decreases in the next 12 months.
Turkish economy rebalanced
It was stated in the statement that Turkiye’s new economic team is expected to further tighten credit conditions and the economy to avoid a direct recession, and that the latest data confirm that the Turkish economy has both slowed down and rebalanced with the weakening of consumption since the beginning of the third quarter.
In the statement, it was stated that the Turkish economy is estimated to grow 3.7% this year and 2.4% in 2024.
On the other hand, in the statement, it was shared that the next planned evaluation for Turkiye will be carried out in 2024.
Source: Trthaber / Prepared by Irem Yildiz