S&P affirms Turkey’s credit rating

Standard & Poor's (S&P) affirmed Turkey's foreign currency credit rating at 'BB' and local currency rating at 'BB+' while the outlook remained "negative", the global rating agency announced Friday. 

Turkey's economy showed a positive response with its strong fiscal impulse against the challenged stemmed from the failed military coup in July 2016. 

S&P, however, warned that economic and financial stability in Turkey may falter if monetary policy would not adequately curb the pressures on inflation. 

The rating agency, on the other hand, said it could revise the outlook to "stable" if Turkey's fiscal position would remain in line with a moderating government debt-to-GDP ratio, and if inflationary pressures disappear. 

"One bright spot in the Turkish economy is exports, which are recovering strongly across almost all categories, leading to a positive contribution of net exports to GDP in the first half of the year," the agency said in a statement. 

The agency noted that export volumes increased by more than 10 percent in the first half of this year as exporters benefitted from weak Turkish lira. 

S&P also said Turkey's economy benefits from "a young and growing working-age population," and underlined that relatively cheap labor and improving infrastructure attract foreign direct investment. 

"The government's efforts to increase women's participation in the workforce have been successful and should benefit growth," S&P said. 

The rating agency said it forecasts Turkey's economy to grow 5 percent this year. 

By Ovunc Kutlu in New York

Anadolu Agency

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