International credit standing company Standard & Poor’s (S&P) revised Türkiye’s outlook from “negative” to “stable” and affirmed its credit standing at B on Friday.
The company stated the secure outlook displays “balanced risks” on Türkiye’s creditworthiness after a return to orthodox financial coverage settings because the Central Bank raises rates of interest.
“In an effort to disinflate and de-dollarize the economy, the Central Bank, under new leadership, has raised the key one-week repo rate by 21.5 percentage points since June, to 30%. To offset fiscal deterioration, the Treasury has introduced indirect taxes,” the worldwide ranking company stated in an announcement.
“We believe that by 2026, absent renewed political uncertainty, the new team can rebalance Turkiye’s economy away from external debt-financed consumption and toward more balanced external and fiscal accounts, as well as more acceptable levels of inflation. Risks to this adjustment — both political and economic — are balanced,” it stated.
The company stated it might revise Türkiye’s outlook to constructive if the “effectiveness and independence of monetary and financial sector policies improved while Turkiye’s balance-of-payments position strengthened, particularly the CBRT’s (Central Bank’s) net foreign currency reserves.”
It additionally forecast Türkiye’s GDP development to decelerate to three.5%, earlier than weakening to 2.3% in 2024.
Source: www.dailysabah.com
