World Bulletin/News Desk
Fitch Rating's Senior Director Paul Rawkins said "A slowdown in Turkey's net capital inflows is likely to temper economic growth, but should not trigger a crisis because of the country's strong fundamentals such as a strong banking system, modest household debt, and a dynamic corporate sector accustomed to adjusting to shocks," speaking at the Fitch Ratings "Credit Outlook 2013" meeting on Thursday in Istanbul.
"Net capital inflows are essential for economic growth in Turkey, where a current account deficit is about 6 % of GDP which mirrors a comparable imbalance between savings and investment. The current account deficit has widened again in 2013 after improving last year, while capital inflows have fallen abruptly since May, and net portfolio flows have turned mildly negative. Banks and corporates, however, have encountered little difficulty rolling over existing exposures. Nonetheless, future funding is likely to prove more expensive", said Rawkins.
Underlining that Turkey is more resistant than expected Rawkings stated that Turkey is affected un-proportionately less since the announcements made by FED.
"Poll results are important for ratings"
Stating that the political state of a country was a weak point in rating, Rawkins said that there is a political uncertainty in Turkey for the moment and political stability seems to be low.
"On the other hand, being aware of this uncertainty, the credit rating of Turkey is BBB- because we don't compare the events in Turkey with those in Arab Spring countries. This is what Fitch thinks," said Rawkins.
Referring to the popularity of the AK (Justice and Development) Party government and popular support to AK Party Rawkins said that the elections to be held in 2014 and 2015 will be important for the tendencies of the foreign investors and the credit rating of the country.
Rawkins also stated that they will follow the impact of the civil war in Syria on Turkish economy as well.Last Mod: 26 Eylül 2013, 16:43