Turkey not expecting rating downgrade from Moody's

By Nuran Erkul

ANKARA

A downgrade to Turkey’s credit rating is not expected from Moody’s in their review on Aug. 5, the president of Turkey’s Investment Support and Promotion Agency (ISPAT) said Sunday.

Arda Ermut, the agency’s president, spoke to Anadolu Agency after Moody’s announced last week it would review Turkey’s rating for a possible downgrade following the July 15 coup attempt.

“Moody's had stated that there were some fragile points in the Turkish economy in April, 2014,” he said. “However, since then, the Turkish economy has reached a stronger position.”

Turkey’s Baa3 rating has remained unchanged since April 2014. Ermut, whose agency is part of the prime minister's office, said the agency considers this rating below the level the country deserves.

Turkey’s GDP increased by 4.8 percent during the first quarter of 2016 compared to the same period last year and the country became one of the fastest growing economies among the G20 and members of the Organization for Economic Cooperation and Development.

“Our country put a number of action plans in place and started to get results,” Ermut said. “Along with that, international investors invested $21 billion in Turkey since the beginning of 2015. Over $13 billion out of this amount was invested in domestic products and services.

“Even these numbers show that Turkey's structural and fiscal strength has improved since 2014.”

The coup attempt put pressure on the political risk factor -- a component of credit rating -- he said.

“However, this attempt was put down as our people flocked to the streets to oppose rogue elements of the military. Solidarity among people removed the political risk factor from Turkey’s agenda.

“Therefore, I do not think Moody’s will take a negative decision on Turkey’s credit rating. Turkey's current credit rating is already less than what it deserves.”

ISPAT will continue to promote foreign investment in the country, Ermut said.

“We have started getting in touch with foreign investors numbering around 10,000 in our database. With these contacts, we saw that their trust in Turkey did not waver and their hunger for making investments is still powerful.”