Fitch says improving Turkey outlook reflects economic rebalancing

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Fitch Ratings said it raised Turkey’s sovereign debt outlook to “stable” from “negative” last week due to the rebalancing in the economy.

The economic situation is improving due to a revival in growth and the erosion of the country’s current account deficit, Douglas Winslow, director in Fitch’s sovereign debt team, said in an interview, state-run Anadolu news agency reported on Wednesday.

“The revision of the outlook from negative to stable reflects some further progress in stabilizing and rebalancing the Turkish economy, easing downside risks since our previous review in July,” Winslow said.

Fitch raised its outlook for Turkey on Friday and affirmed its “BB” sovereign rating. It also revised up its economic growth forecast for this year by 0.8 percentage points to 0.3 percent and maintained its forecasts of 3.1 percent growth for 2020 and 3.6 percent in 2021.

“The external financing position of banks and corporates is somewhat more stable, foreign exchange reserves have moderately increased, inflation has fallen and the lira has held its value despite the greater-than-expected interest rate cuts, helped by the U.S. announcement on removing Syria-related sanctions, and by more favorable global financing conditions,” Winslow said.

Ahval

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