Fitch Ratings has upgraded Turkey’s credit rating with a stable outlook on improved external buffers as the country continues with its tight monetary policy to rein in inflation.
The company moved the nation’s sovereign rating one notch higher to BB-, from B+, it said in a report on Friday.
This is the second time the rating agency has upgraded Turkey’s credit rating this year after a similar move in March.
Turkey's reserve composition has strengthened and the central bank's net foreign asset position has improved from a low of minus $75 billion in early April to a positive $6 billion at the end of August on increased access to external borrowing and higher capital inflows, it said.
Turkey has been raising interest rates since last year to bring down inflation after it abandoned President Recep Tayyip Erdogan’s unorthodox policy of keeping interest rates low to spur growth.
Inflation fell from a peak of 75 per cent in May to 52 per cent in August as the central bank raised interest rate.
“Fitch has greater confidence that the maintenance of a tight monetary policy stance (with an easing cycle starting in early 2025), combined with projected fiscal consolidation and prudent minimum wage adjustments will support a significant decline in inflation and help maintain improved external liquidity buffers and low current account deficits,” it said.
Fitch expects inflation to finish 2024 at 43 per cent, resulting in average inflation of 59.5 per cent for the year.
Average inflation is expected to decline to 31 per cent in 2025, finishing the year at 21 per cent. Turkey’s central bank projects inflation at 38 per cent by the end of the year.
“Given the still high projected level of inflation, the premature easing of monetary policy or the abandonment of the current policy direction, which is not our base case, could reignite inflationary pressures and consequently macro-financial stability,” Fitch said.
Turkey’s central bank is expected to continue to maintain its tight monetary policy stance “until price stability is achieved”, its governor Fatih Karahan said last month.
The current account deficit is expected to remain low amid a tight monetary policy, improved export demand derived from the recovery in the eurozone, continued growth in tourism receipts and lower gold and consumer imports.
The central government deficit is also expected to ease slightly to 5 per cent of gross domestic product in 2024 from 5.2 per cent in 2023, “thus outperforming the budgeted 6.4 per cent”, according to Fitch.
In 2025, it is forecast to decline to 3.1 per cent of GDP and further to 2.8 per cent in 2026.
“Fiscal consolidation will be supported by a decline in spending related to earthquake reconstruction, increased expenditure discipline, the gradual reduction in electricity and gas subsidies, and tax revenue measures seeking to improve collection.”
The general government debt is also expected to continue to decline to 27.3 per cent of GDP, from 29.6 per cent in 2023.
“Our baseline is that the current economic programme maintains support from the political leadership,” Fitch said.
“Nevertheless, the risk of policy reversals remains present, given Turkey's recent history, the strong belief, at the highest political levels, in low interest rates and the potential resistance from vested interests and lobby groups.”
Turkey also received credit rating upgrades from S&P Global Ratings and Moody’s this year.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
more from Janine di Giovanni
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
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Buy farm-fresh food
The UAE is stepping up its game when it comes to platforms for local farms to show off and sell their produce.
In Dubai, visit Emirati Farmers Souq at The Pointe every Saturday from 8am to 2pm, which has produce from Al Ammar Farm, Omar Al Katri Farm, Hikarivege Vegetables, Rashed Farms and Al Khaleej Honey Trading, among others.
In Sharjah, the Aljada residential community will launch a new outdoor farmers’ market every Friday starting this weekend. Manbat will be held from 3pm to 8pm, and will host 30 farmers, local home-grown entrepreneurs and food stalls from the teams behind Badia Farms; Emirates Hydroponics Farms; Modern Organic Farm; Revolution Real; Astraea Farms; and Al Khaleej Food.
In Abu Dhabi, order farm produce from Food Crowd, an online grocery platform that supplies fresh and organic ingredients directly from farms such as Emirates Bio Farm, TFC, Armela Farms and mother company Al Dahra.
Killing of Qassem Suleimani
Results
2.30pm: Park Avenue – Conditions (PA) Dh80,000 (Dirt) 2,000m; Winner: Rb Seqondtonone, Abdul Aziz Al Balushi (jockey), Helal Al Alawi (trainer)
3.05pm: Al Furjan – Maiden (TB) Dh82,500 (Turf) 1,200m; Winner: Bosphorus, Dane O’Neill, Bhupat Seemar
3.40pm: Mina – Rated Condition (TB) Dh105,000 (D) 1,600m; Winner: Royal Mews, Tadhg O’Shea, Bhupat Seemar
4.15pm: Aliyah – Handicap (TB) Dh87,500 (T) 1,900m; Winner: Ursa Minor, Ray Dawson, Ahmad bin Harmash
4.50pm: Riviera Beach – Rated Conditions (TB) Dh95,000 (D) 2,200m; Winner: Woodditton, Saif Al Balushi, Ahmad bin Harmash
5.25pm: Riviera – Handicap (TB) Dh2,000 (T) 2,000m; Winner: Al Madhar, Antonio Fresu, Musabah Al Muhairi
6pm: Creek Views – Handicap (TB) Dh95,000 (T) 1,400m; Winner: Al Salt, Dane O’Neill, Erwan Charpy
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
COPA DEL REY
Semi-final, first leg
Barcelona 1 (Malcom 57')
Real Madrid (Vazquez 6')
Second leg, February 27
Racecard
6pm: Al Maktoum Challenge Round 2 Group 1 (PA) $55,000 (Dirt) 1,900m
6.35pm: Oud Metha Stakes Rated Conditions (TB) $60,000 (D) 1,200m
7.10pm: Jumeirah Classic Listed (TB) $150,000 (Turf) 1,600m
7.45pm: Firebreak Stakes Group 3 (TB) $150,000 (D) 1,600m
8.20pm: Al Maktoum Challenge Round 2 Group 2 (TB) $350,000 (D) 1,900m
8.55pm: Al Bastakiya Trial Conditions (TB) $60,000 (D) 1,900m
9.30pm: Balanchine Group 2 (TB) $180,000 (T) 1,800m
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
