Moody’s could upgrade Turkey rating

Moody’s Investors Service has said that should Turkey continue to pursue fiscal and monetary policies that reverse the growth in internal and external imbalances, then the Turkish rating could be upgraded.

Moody’s annual sovereign report on Turkey noted: “Credit-positive pressure could also develop if the government consolidates its buffers, such as foreign-exchange reserves; these would improve the sovereign’s resilience to balance-of-payment shocks.”

The report by Moody’s said that Turkey’s strong economic performance and resilience to the global financial crisis has left the Turkish economy outlook as positive, the positive outlook on Turkish government sovereign debt rating remains at Ba2.

In recent years the Turkish government has strengthened the balance sheet and dramatically improved the government’s ability to withstand shocks, according to the report by Moody’s.

The report noted that the biggest challenge remaining for Turkey in the future remains the current account deficit and the financing of it. Should Turkey manage to overcome these obstacles, the future looks very positive for the Turkish economy compared with the rest of Europe and the world.

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