A statement from S&P on Friday listed two reasons for Turkey’s credit outlook revision.
"First, we believe that Turkey's fiscal and monetary policies have exposed the country to a potential hard landing as external conditions tighten. In particular, Turkey's external and fiscal positions could suffer beyond our base-line forecasts published on Nov. 22, 2013, should GDP performance worsen beyond our current expectations,” the statement said.
"Second, Turkey appears to have suffered an unanticipated erosion of institutional checks and balances and governance standards. For example, we believe that any constraints on the independence and transparency of the Central Bank of the Republic of Turkey (CBRT) pose a risk to an economy that has traditionally relied on significant external financing needs.”
"S&P negative decision on Turkey not to affect market much"
Economists said that international credit rating agency Standard & Poor’s (S&P)’s latest revision of Turkey’s credit outlook to 'negative' from 'stable' will not have much influence on markets.
“S&P has some concerns over growth, but this decision can be defined as one being made hastily,” said Gokhan Uskuay, strategy manager at Istanbul-based Global Securities brokerage company.
“I can say that it would have influence if Moody’s or Fitch made the same decision,” said Uskuay. He said that, unlike the other two, S&P was already negative on Turkey for investments.