In a significant boost to Turkey’s economic outlook, Moody’s, a leading global credit rating agency, has upgraded the country’s credit rating from B3 to B1, while maintaining a positive outlook. This marks the first time in 11 years that Turkey has received a two-level increase in its credit rating.Turkish Finance Minister Mehmet Şimşek welcomed the decision, attributing it to several key factors: ‘The balance in the economy, decreasing foreign financing needs, increasing international reserves, and the disinflation process have all contributed to the rating increase,’ he stated. Şimşek emphasized that the positive outlook reflects confidence in the government’s economic program and indicates potential for future rating increases.Moody’s decision was largely driven by improvements in Turkey’s economic management, particularly its return to orthodox monetary policies. The agency noted that these policies have led to clear results in reducing the country’s main economic imbalances. The Turkish Central Bank’s efforts to boost the credibility of its monetary policy have helped restore confidence in the Turkish Lira, although the dollar’s value in Turkey remains high.The business community has responded positively to the upgrade. Dr. Erkan Kork, CEO of BankPozitif Kredi ve Kalkınma Bankası, stated that the increase is a result of the country’s political stability, improved confidence, and correct economic policies. He expects this trend to continue, particularly in the fall, and believes it will accelerate capital inflows and positively affect Turkey’s long-term growth.Looking ahead, Moody’s expects inflation and internal demand to moderate significantly in the coming months and into 2025. The Turkish government, led by President Recep Tayyip Erdogan and Finance Minister Nureddin Nebati, has committed to continuing its rule-based and predictable policies to further strengthen the economy’s resilience.
Key points
- Moody’s has upgraded Turkey’s credit rating from B3 to B1, the first two-level increase in 11 years.
- The upgrade is attributed to improvements in economic management, particularly in monetary policy and inflation control.
- Turkish Finance Minister Mehmet Şimşek welcomed the decision, citing economic balance, decreasing foreign financing needs, and increasing international reserves.
- Business leaders expect the upgrade to accelerate capital inflows and positively affect Turkey’s long-term growth.
