Moody’s revises up GDP forecast

ISTANBUL

International credit rating agecny Moody’s has revised up its Turkey growth forecast for this year from 9.2 percent to 11 percent.

“Moody’s expects that real GDP growth will slow to around 4 percent in 2022, compared to this year’s extraordinary growth rate that Moody’s estimates will come in at around 11 percent,” Moody’s said on Dec. 3.

“Turkish banks and large corporations - the main borrowers abroad - are well protected against currency depreciation. The banking sector overall has a broadly balanced FX position, including its large foreign-currency deposits abroad of $43 billion,” it added.
On the other hand, Moody’s affirmed Turkey’s B2 ratings and maintained negative outlook for the Turkish economy.

“Moody’s expects that Turkey’s public finances will remain relatively robust, with public debt staying at around 40 percent of GDP in 2022.”

“The outlook could return to stable if the currency stabilized and maturing debt continued to be rolled over smoothly, indicating low risk of market stress. A change in the monetary policy stance with a focus on re-anchoring inflation expectations would also be positive,” said Moody’s.