S and P Global’s decision last week to revise upwards Trkiye’s outlook to positive reflects “increasing evidence that the economy is rebalancing,” the head Europe, Middle East, and Africa sovereign specialist at the credit rating agency said on Wednesday.
Delivering a presentation at S and P Global webinar called Spotlight on Emerging Markets: Trkiye 2024 Outlook, Frank Gill said: “We think signs are that the reintroduction of orthodox monetary policy in particular is starting to pay dividends in terms of a rebalancing of the economy and increased domestic savings, a slowdown in consumption and hence the contraction of imports.”
S and P Global on Thursday revised its outlook on Trkiye from stable to positive, affirming the country rating at “B.’
Gill stressed that the Turkish economy is expected to “benefit from a soft landing”.
He added that the Turkish Central Bank’s rate hike of 31.5 percentage points to 40% in November from 8.5% is estimated to encourage the de-dollarization of domestic savings.
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nd P Global projects that the fiscal deficit for this year will come in below than targeted at 4.3% of GDP, and that the current account deficit will gradually shrink with the backing of a sharp decline in imports, he stressed.
The agency could raise the rating should the balance of payments outcomes improve, and domestic savings in the Turkish lira rise, leading to a rebuilding of Turkish usable foreign currency reserves, he said.
Source: Anadolu Agency