Bloomberg News

Fitch Says ‘Jury Still Out’ on Turkey Credit Rating Upgrade

September 30, 2011

Sept. 30 (Bloomberg) -- Ed Parker, Fitch Ratings Ltd.’s head of European emerging-market ratings, comments on Turkey’s economy and the country’s sovereign credit rating.

He was speaking in a telephone interview with Bloomberg from London. Fitch, which ranks Turkey one level below investment grade, had put the country under review for a possible upgrade at the end of 2010.

On Turkey rating:

“Basically no change. We have been saying for a year now the key question for us is whether Turkey can achieve a healthy, sustainable growth rate without major macroeconomic imbalances such as high inflation and large current account deficit. For us the jury is still out on that.”

On timing of Turkey upgrade:

“There is no specific time frame we are working to. It really depends on how the economy evolves. I am reluctant to put a time frame on it because for us it is not really about time frame, it is about what happens to the economy. But certainly within the next 12 months, we should be able take that judgment on the economy, on whether or not you achieved this soft landing or not. It is uncertain and we are not there yet, we need to see how the economy develops and those uncertainties resolved before we take our judgment one way or the other.”

On the economy:

“The economy was clearly overheating in the first half of the year. Now the economy is clearly slowing down, and the current account deficit will likely come in, and inflation may be less certain. I think it is still uncertain whether Turkey can engineer the right balance from slowing down from a previous unsustainable pace of expansion to a sustainable pace, have a soft landing without going to a recession or hard landing, that remains the key question for us.”

--Editor: Mark Bentley

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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