Fitch revises Turkey's outlook to positive.

By bne IntelliNews November 25, 2010
Fitch Ratings revised the Outlook on Turkey's Long-term foreign and local currency Issuer Default Ratings (IDR) to Positive from Stable and affirmed them at 'BB+'. Fitch says it also affirmed Short-term foreign currency IDR at 'B' and the Country Ceiling at 'BBB-'. Head of Emerging Europe in Fitch's Sovereigns team, Ed Parker, asserts that the revision reflects the country's strong economic recovery, improving public finances and increasing confidence that a lasting transformation in Turkey's economic prospects and stability is underway. Nevertheless, there is some uncertainty whether Turkey can grow robustly without generating significant imbalances that pose a threat to macroeconomic stability, Parker says. The statement by Fitch also notes that potential triggers for future rating actions could be; the implementation of fiscal policy consistent with a downward trend in the government debt-to-GDP ratio could lead to an upgrade. Fitch would also regard favourably a further lengthening in the maturity of government debt, the statement asserts. Robust economic growth consistent with disinflation and broad macroeconomic balance would put upward pressure on the rating and major labour market reform would be positive, according to the statement. Coming through the parliamentary elections and prospective constitutional amendments without a material increase in political instability would support the case for an upgrade, Fitch says. Significant macroeconomic or financial instability, material fiscal slippage or a major political shock could lead to negative rating action, the statement says.

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