Wednesday, 01 December 2021 09:58 GMT

Fitch raises concern over negativity in Turkish economy


(MENAFN) Fitch Ratings International has warned of negativity in Turkey's economy over the next phase after applying a presidential system with a new government.

Turkey's Issuer Default Rating (IDR) has been reduced by the agency from 'BB+' to 'BB', presenting a negative outlook and entrenching the Turkish sovereign debt position further into the category of speculative investments.

In a statement, Fitch noted "economic policy credibility has deteriorated in recent months and initial policy actions following elections in June have heightened uncertainty."

Fitch then suggested "this environment will make it challenging to engineer a soft landing for the economy."

It added "Fitch believes downside risks to macroeconomic stability have intensified owing to the widening in the current account deficit (CAD), more challenging global external financing environment, jump in inflation and the impact of the plunge in the exchange rate on the private sector, which has significant foreign currency-denominated debt."

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