Moodys: Large CA deficit, political conflicts are Turkeys credit challenges.

By bne IntelliNews October 31, 2012
The credit challenges facing Turkey include substantial external vulnerabilities, including a large current account deficit and history of political turbulence derived from conflict between secular and religious elements of society, ratings agency Moodys said in a statement on Tuesday. Turkeys resilience to economic, financial and political vulnerabilities has strengthened considerably in recent years, nonetheless there are some noteworthy areas of political risk in Turkey some of which stem from secular-religious tensions, others from longstanding regional and ethnic conflicts and due to the size of the countrys external imbalances, Moodys considers Turkeys susceptibility to event risk to be high, the rating agency said. A prerequisite for Turkey attaining an investment-grade rating is a greater resilience to balance of payment shocks, such as a sharp decline in capital inflows into the country, according to the rating agency. Moodys would also consider upgrading Turkeys rating if the government made further progress in lowering its external vulnerabilities by structurally reducing its CA deficit, increasing foreign exchange reserves or reducing the private sectors external borrowing, the statement furthered. Moodys expects Turkeys CA deficit to be 7.8% and 7.4% of GDP in 2012, and 2013 respectively while its GDP growth forecasts stands at 3% and 3.8% for this year and next year. Moodys also said that Turkeys currently positive outlook on its sovereign bond rating would likely to be moved to stable if progress on addressing external vulnerabilities were to be reversed.

Moodys: Large CA deficit, political conflicts are Turkeys credit challenges.

Notice: Undefined index: social in /var/www/html/application/views/scripts/index/article.phtml on line 259

Related Articles

PKK leader Ocalan calls for ceasefire and withdrawal of militants from Turkey.

The jailed leader of the PKK, Abdullah Ocalan, called for a ceasefire on Thursday, ordering armed PKK militants to withdraw from Turkey. Hundreds of thousands of people gathered in the city of ... more

Syrian government says Turkey responsible for chemical attack.

The Syrian government said the rebel groups foreign supporters, Turkey and Qatar, were responsible for a chemical attack in Aleppo. The countries that back and support the rebels, including ... more

Erdogans comments on Zionism clouds US secretary of states Turkey visit.

US secretary of state John Kerry was in Ankara on Friday for talks with the Turkish leaders, including PM Recep Tayyip Erdogan and President Abdullah Gul, focused on the crisis in Syria, ... more