By Gokhan Kurtaran
LONDON
Turkey’s economy is ready for faster growth in a more stable environment, Fitch Sovereign Ratings Director, Gergely Kiss said.
“We affirmed Turkey’s “BBB-“ rating and we see the outlook as 'stable.' Supporting this view is the relatively strong Turkish credit profile.” Kiss said in an exclusive interview with the Anadolu Agency (AA).
“It is important to see that Turkey has a strong fiscal position, its debt has declined over the last 2 years and also the deficit is below 3 percent of the GDP,” Kiss explained. Fiscal consolidation -- that is the implementation of concrete policies aimed at reducing government deficits and debt accumulation, has been managed with considerable success in Turkey, according to studies by the Organization for Economic Co-operation and Development. Kiss noted also that the economy continues to show encouraging signs of rebalancing, notably a moderation in the current account deficit and credit growth with stable capital inflows.
Kiss warned, however, that Turkish exports are suffering from the continuing conflict in Iraq. In the last two years, Iraq has became the second-largest export market for Turkey, and the violence in Iraq is affecting its import performance. However, Turkish exports increased by 6.5 percent in September compared with the same period in the previous year, according to the Turkish Exporters' Assembly.
For Turkey’s credit outlook to improve, Kiss pointed out the importance of controlling inflation, stimulating growth and narrowing the current account deficit.
“Less reliance by lenders of foreign capital, which would reduce the current account deficit, and further progress on income distribution, would be two factors that would make for a positive improvement,” Kiss said.
Regarding Turkish economic growth, Kiss said that performance would hit rock bottom with 2.7 percent this year and then start to speed up again next year.
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