Fitch: Turkey credit score ‘could improve’ after election

LONDON

The future of Turkey’s credit profile depends on whether the country can now rebalance its economy, a ratings agency said Monday.

Fitch Ratings said the Turkish sovereign rating, which stands at an investment grade BBB-, could improve if the new government implements reforms that promote "durable" economic growth.

"The advent of a stable majority government will remove the drag on economic growth caused by political uncertainty," Fitch said in a statement Monday. "But it is not yet clear whether the election outcome will support structural reform and help resolve tensions among policy makers on how best to support growth, rebalance the economy, lower reliance on net capital inflows, and reduce inflation."

Fitch said its forecasts suggested real GDP growth in Turkey would increase early in 2016.

Its statement concluded: "Resolving policy uncertainty and unpredictability, and implementing reforms that promote durable economic growth and rebalancing that reduce external vulnerabilities, would be positive for the sovereign rating."