S&P: Turkish economy still vulnerable to reversal of capital flows.

By bne IntelliNews April 30, 2014

Turkey’s economy remains highly vulnerable to a reversal in foreign capital flows because of its large current account deficit and increasing reliance on short-term foreign funding for its financing, Standard & Poor's economist Tatiana Lysenko said in an article.

S&P expects slower growth in Turkey, averaging 2.4% in 2014 and 2.7% in 2015 while the rating agency sees the risk of a hard landing if another wave of capital outflows were to hit this year and next. The current global environment offers the Turkish economy opportunities to rebalance its growth model, the article said, adding that compared to euro area periphery sovereigns Turkey is currently in a better position to offset a weakening domestic economy by exporting. However, Turkey is not a particularly open economy and an export recovery is unlikely to fully offset the drag on growth from a cooling domestic economy, according to the article. Last week, S&P commented in a report that the main risk to Turkish companies is higher-than-expected slowing in credit growth due to the central bank's and banking regulator’s plans to keep this in check and ultimately reduce the current account deficit.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

Despite local elections defeat Erdogan “remains in control” at head of “super-executive regime”, says analyst

Despite his AKP party’s defeat in the weekend’s local elections, Turkish President ... more

Turkish footwear manufacturers step up investments in Uzbekistan’s leather and footwear industries

Turkish footwear manufacturers are stepping up their investments in Uzbekistan’s leather and footwear industries, according to local reports. A $1mn investment in the manufacture of leather, ... more

Shipping companies latest to feel effects of “West’s very tight blockade against Turkey’s banking system", says report

Shipping companies are the latest to feel the effects of “the West’s very tight blockade against the Turkish banking system”, according to a report by Turkish publication Ekonomim. In ... more

Follow Us On

Most Read

  1. Ukraine's birth rate plummets to 300-year low as country’s population collapses
    8 days ago
  2. EU finally boosts defence investment into arms production as Ukraine runs out of ammo
    1 month ago
  3. Don't mention the "D" word - Ukraine
    5 days ago
  4. The 'wet-bulb' set to kill hundreds of thousands of people if temperatures and humidity levels continue to rise
    3 days ago
  5. Europe unlikely to tackle Russian LNG imports anytime soon
    2 days ago
  1. Russia could pay off its entire external debt tomorrow, in cash
    26 days ago
  2. Speculation swirls of “Men in Blue” in Crocus City Hall terrorist attack linked to FSB
    30 days ago
  3. Albanians campaign on social media to keep bus bridge created in freak accident
    1 year ago
  4. BRICS announce a blockchain-based payment system to create a common currency
    28 days ago
  5. Saudi Arabia to scale back plans for Neom city
    15 days ago

Reports

Dismiss