Due to a strong performance in the first 3 months of 2021 and a steady growth in it’s economy Fitch has improved Turkey’s forecast from 6.3% in June to 7.9% and as a result has moved their credit rating to BB, with a realistic & stable outlook for the year ahead.
BB essentially reflects high inflation, but low external liquidity and weak monetary policy credibility, all of which can be related back to a tough 18 months due to the Covid Pandemic, where governments did what they could to bolster a fledgling economy, but as things have now started to turn around, inflation should start to ease due to a more favourable base effect, and the current account deficit should decline too, to around 3% of the GDP in 2021.
Fitch is one of the Big Three Credit Rating Agencies from which forward looking opinions are based on the ability of an entity to meet financial commitments. The ratings range from AAA to RD, and are categorised into Issuer Default Ratings, National Long Term Credit Ratings, National Short Term Credit Ratings, Recovery Ratings & Bank Viability Ratings.
