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

Four Turkish companies reportedly consider IPOs in London or Istanbul

Turkey’s Enerjisa, Memorial Health Group, Tab Gida and Baskent Gaz are considering public offerings in London or Istanbul, unnamed sources told Bloomberg on July 19. Enerjisa, a 50:50 JV ... more

Turkey bars entry to thousands from more than 140 nations over suspected IS ties

Turkey has arrested and deported thousands of people suspected of having links to the Islamic State group according to a Turkish interior ministry report entitled “Turkey’s Fight ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more

Most Read

  1. Wildfires hit Croatia and Montenegro’s Adriatic coast
    6 days ago
  2. Tajik president’s 23-year old daughter appointed deputy head of largest Tajik bank
    4 days ago
  3. Bosnia’s ruling coalition collapses
    2 days ago
  4. Siemens considers quitting Russia
    10 days ago
  5. FINTECH: A Russian fintech revolution is coming
    10 days ago
  1. CHINA RISING: When sleeping giants meet
    13 days ago
  2. Belarus’ retail king Euroopt goes on the road
    19 days ago
  3. STOLYPIN: Russia’s cyber-challenge cuts both ways
    21 days ago
  4. Siemens considers quitting Russia
    10 days ago
  5. COMMENT: Gazprom’s exit from Turkey is a sign of the times
    11 days ago

Selected articles from our premium news/views wire IntelliNews Pro

Login to IntelliNews Pro
Get IntelliNews Pro

Reports

Dismiss