Turkish rating outlook stable, may improve-Moody's
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Turkey's credit rating outlook is stable, but the rating could improve over time should the economy regain its growth and also momentum towards EU membership, an analyst at ratings agency Moody's said.
The emerging market economy has been hit hard by the global financial crisis and a slump in domestic and foreign demand, and the agency expects 2008 growth of 1.8 percent - sharply below 7 percent annual levels since a 2001 financial crisis.
Lindow, in reply to questions by email, said late on Monday
Turkish officials are currently holding talks with an International Monetary Fund (IMF) team in
Business leaders and financial markets regard such a deal as key to restoring confidence in the economic outlook. Those concerns and growing risk aversion battered Turkish financial markets last year.
"An IMF deal is likely to increase confidence that the country has an external financing backstop in these uncertain times. The rating outlook (12-18 month time horizon) is stable," Lindow said.
"Should the economy regain its growth and EU membership momentum, the rating could improve over time," she said.
Moody's said it expected 2009 consumer price inflation of 7 percent, compared with 10.1 percent last year.
The Turkish Central Bank slashed benchmark overnight rates by a larger-than-expected 200 basis points last week, due to expectations of falling inflation, in a bid to kick start the economy.
According to Moody's forecast, the current account deficit would amount to 2.3 percent of gross domestic product this year, falling sharply from 5.6 percent in 2008.
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